US STOCKS-Wall St gains capped by big banks’ tepid forecasts

* JPMorgan, Wells Fargo, Citigroup lower after quarterly

* June CPI comes in below expectations

* Retail sales falls for second straight month in June

* Indexes up: Dow 0.09 pct, S&P 0.17 pct, Nasdaq 0.19 pct
(Adds details, changes comment, updates prices)

By Tanya Agrawal

July 14 (Reuters) – U.S. stocks edged higher in late morning
trading on Friday as weak economic data dimmed chances of
another rate hike this year, while tepid forecasts by JPMorgan
and Wells Fargo limited gains.

Shares of JPMorgan fell 1.7 percent, Citigroup
was down 1.1 percent and Wells Fargo fell 2.4 percent,
despite their quarterly profits beating analysts’ expectations.

The financial index fell 1.03 percent and was the
only laggard among the 11 major S&P sectors.

Bank of America, Goldman Sachs and Morgan
Stanley will report results next week.

“The bar for earnings is higher this time around, especially
after the phenomenal growth we saw in the first quarter. So
companies that miss expectations or guide down will be overly
punished,” said Michael Scanlon, portfolio manager at Manulife
Asset Management.

Bank of America was the biggest drag on the S&P and Goldman
Sachs shaved off 21 points from the Dow.

Analysts estimate second-quarter earnings for the S&P 500
companies rose 7.8 percent from a year earlier, after first
quarter earnings posted their best performance since 2011,
according to Thomson Reuters I/B/E/S.

Earnings will be closely watched to see if high valuations
are justified in the face of tepid inflation and a recent patch
of mixed economic data.

The S&P 500 has been trading at about 18 times earnings
estimates for the next 12 months, compared with the long-term
average of 15 times.

At 10:51 a.m. ET (1451 GMT), the Dow Jones Industrial
Average was up 20.41 points, or 0.09 percent, at
21,573.5, the S&P 500 was up 4.37 points, or 0.17
percent, at 2,452.20.

The Nasdaq Composite was up 11.84 points, or 0.19
percent, at 6,286.28.

Ten of the 11 major S&P sectors were higher, with defensive
sectors such as real estate, utilities and
consumer staples leading the advancers.

Data showed consumer prices were unchanged in June and
retail sales fell for a second straight month, pointing to tame
inflation and subdued expectations of strong economic growth in
the second quarter.

Chances of a rate hike in December fell to 47 percent after
the release of data points, from 55 percent at Thursday’s close.

Earlier this week, Federal Reserve Chair Janet Yellen said
future rate hikes could be gradual in the face of persistently
low inflation.

Among stocks, Nutanix jumped 7.5 percent after
Goldman Sachs added the cloud data-storage firm to its
conviction list.

Advancing issues outnumbered decliners on the NYSE by 1,943
to 774. On the Nasdaq, 1,395 issues rose and 1,239 fell.
(Reporting by Tanya Agrawal; Editing by Arun Koyyur)