US STOCKS-Wall St up on bipartisan talks, energy shares lead


(Corrects Tesoro reference in paragraph 6 to Tesoro Logistics,not Tesoro Corp)

* Republicans offer to push back default, reopen government

* Tesoro leads energy stocks after EPA change

* JP Morgan up after earnings, Wells Fargo slips

* Indexes up: Dow 0.7 pct, S&P 0.6 pct, Nasdaq 0.9 pct

By Julia Edwards

NEW YORK, Oct 11 (Reuters) - U.S. stocks rose on Friday,extending the previous day's rally, on investor hopes that asolution to end the partial government shutdown and stave off apossible U.S. default would be forthcoming.

One motivation for Friday's buyers was the chance anagreement could come over the weekend. The Senate is expected tovote over the weekend on extending the federal borrowing limitthrough January 2015.

"People don't want to be short going into a weekend,especially if a deal does get done," said Dennis Dick,proprietary trader at Bright Trading LLC in Las Vegas.

The partial government shutdown is now in its eleventh dayand less than a week remains before an Oct. 17 deadline toextend the government's borrowing authority and avoid a debtdefault.

All S&P sectors were up except consumer staples, which wasonly slightly down. Energy stocks led the S&P 500, up1.1 percent after the Environmental Protection Agency proposedlowering the required amount of ethanol to be blended into U.S.gasoline after Thursday's market close on Thursday.

Among individual stocks, Tesoro Logistics LP shareswere down 1.6 percent at $54.77 after regulators said initialinvestigations following a 20,600-barrel leak on TesoroLogistics' pipeline in North Dakota point to corrosion on the20-year-old pipeline.

JP Morgan Chase & Co, the biggest U.S. bank byassets, reported a rare quarterly loss after incurring $9.2billion in legal expenses. Shares of the stock were higher,rising 0.6 percent to $52.83.

"If you peel back the onion, J.P. Morgan at the base of thisis operating quite well, which comforts investors," said JeffMorris, head of U.S. equities at Standard Life Investments inBoston.

The Dow Jones industrial average was up 87.24 points,or 0.58 percent, at 15,213.31. The Standard & Poor's 500 Index was up 9.23 points, or 0.55 percent, at 1,701.79. TheNasdaq Composite Index was up 28.64 points, or 0.76percent, at 3,789.39.

Wells Fargo & Co, the biggest U.S. mortgage lender,reported a 13 percent rise in third-quarter profit, but itsmortgage banking income fell sharply as the refinancing boombegan to fade. Wells Fargo was down at 0.07 percent to $41.41.

Retail apparel chain Gap was down 2.7 percent to$36.74 a day after reporting net sales were flat compared withlast year.

The Thomson Reuters/University of Michigan index of consumersentiment fell in October to its weakest in nine months and was below expectations. (Editing by Bernadette Baum and Kenneth Barry)


View Comments