US STOCKS-Wall St sets 5th weekly gain on banks, Boeing off late

* Banks rise after Wells Fargo preliminary results
* Retailers gain after sales fall less than expected
* Boeing falls after the bell on profit warning
* Dow up 3.1 pct, S&P up 3.8 pct, Nasdaq up 3.9 pct
* For up-to-the-minute market news click [STXNEWS/US]

(Adds Boeing's slide after the bell, weekly percentage gains
in the major U.S. stock indexes and volume figures)
By Leah Schnurr
NEW YORK, April 9 (Reuters) - U.S. stocks jumped on
Thursday after Wells Fargo said it expects to report a record
quarterly profit, fueling a month-long rally prompted by hopes
that deterioration in the financial sector was abating.
Wells Fargo shares shot up 31.7 percent to $19.61
after the bank saw strength in its mortgage banking business
as refinancings hit a six-year high. That helped the bank
forecast a profit of $3 billion for the first quarter, topping
analysts' expectations. For more, see [nN09260398]
The state of the banks has been a key factor behind the
stock market's sentiment and is at the heart of the global
economic crisis. The current rally to two-month highs first
took off in early March when several major banks said they had
made money at the beginning of the year.
"This is another step in that (banks) are about to report
earnings that are not a disaster and are creeping into the
black," said Bruce Zaro, chief technical strategist at Delta
Global Advisors in Boston.
"It's another piece of gathering evidence that banks can
very likely weather and probably pass the worst operating
results that they've seen."
In the latest sign that the mood of consumers is on the
mend, many U.S. retailers posted smaller-than-expected sales
declines for last month, signaling shoppers may be loosening
their grip on their wallets. [nN09540393].
The Dow Jones industrial average <.DJI> rose 246.27
points, or 3.14 percent, to 8,083.38. The Standard & Poor's
500 Index <.SPX> gained 31.40 points, or 3.81 percent, to
856.56. The Nasdaq Composite Index <.IXIC> climbed 61.88
points, or 3.89 percent, to 1,652.54.

BOEING DROPS AFTER THE BELL
But there was more evidence that companies continue to
struggle with the recession's impact after the bell when Dow
component Boeing said it would cut airplane production
in 2010, citing weak business conditions for commercial
customers.
Boeing also said its first-quarter earnings would take a
hit, driving its stock down 4.2 percent to $37.50 in extended
trade. [nN09262486].
The broad S&P 500 racked up its fifth consecutive weekly
advance and is up more than 26 percent since the 12-year
closing low reached on March 9.
For the week, the Dow added 0.8 percent, while the S&P 500
gained 1.7 percent and the Nasdaq climbed 1.9 percent.
Markets will be closed for the Good Friday holiday.

JPMORGAN JUMPS, CATERPILLAR CLIMBS
In another sign of changing market sentiment, the CBOE
Volatility Index <.VIX>, also known as Wall Street's fear
gauge, closed at its lowest level since September 2008.
Investors also dumped defensive stocks in the consumer and
health-care areas in favor of companies more tied to the
economic cycle. Among losers, Merck was down 1.7
percent at $26.30, while on the flip side, Caterpillar
gained 10 percent to $32.52.
Shares of JP Morgan Chase surged 19.4 percent to
$32.75, making it the Dow's top performer. The KBW Bank index
<.BKX> jumped 20.1 percent and was up for the fifth straight
week, its longest weekly winning streak since the fall of
2006. It was the best gain for the bank index since at least
1993.
However, analysts cautioned that the news from Wells Fargo
was not an all-clear signal for the sector.
"It is still going to remain a bank-to-bank issue," said
Fred Dickson, market strategist and director of retail
research at D.A. Davidson & Co in Lake Oswego, Oregon.
"I don't think one can generalize and make a blanket
statement that all the bank results are going to be slightly
better than what is currently expected."
U.S. President Barack Obama plans to meet with top
financial regulators on Friday to discuss the next steps with
the "stress tests" being conducted on major U.S. banks, a
source said. [nN09454931].
On the economic front, data showed the number of workers
filing new claims for unemployment benefits fell last week,
but the number was still at a level signaling the job market
had yet to bottom. [nN09264963].
Some recent better-than-expected data in the retail and
housing sectors also helped drive the market higher as
investors bet on signs of stabilization.
Among retailers, department store chain Macy's Inc
was up 15.1 percent at $11.88. The S&P retail index <.RLX>
gained 4.6 percent.
Berkshire Hathaway rose after the profit
projection from Wells Fargo, one of the bank's largest
investments. The gains came the day after Berkshire lost its
"triple-A" credit rating. Berkshire's Class A shares rose 3.9
percent to $92,400. [nN09254003].
Apple Inc led the Nasdaq higher, rising 2.8
percent to $119.57 after Credit Suisse lifted its price target
on the stock to $133 from $120.
Trading was moderate on the New York Stock Exchange, with
about 1.84 billion shares changing hands, above last year's
estimated daily average of 1.49 billion, while on Nasdaq,
about 2.19 billion shares traded, below last year's daily
average of 2.28 billion.
Advancing stocks outnumbered declining ones on the NYSE by
a ratio of about 7 to 1, while on the Nasdaq, about five
stocks rose for every one that fell.
(Additional reporting by Edward Krudy; Editing by Jan
Paschal)
((leah.schnurr@thomsonreuters.com; +1 646 223 6393; Reuters
Messaging: leah.schnurr.reuters.com@reuters.net))
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