Midday Commentary: Market stays firm; Wells Fargo up, JPMorgan mixed on increased profits

By Stephanie N. Rotondo

Phoenix, July 12 - Preferred stocks were strong Friday, as investors reacted to good bank earnings from Wells Fargo & Co. and JPMorgan Chase & Co.

However, it was light in terms of volume, which a trader attributed to a decline in the consumer confidence index.

"People are thinking the economy is not as strong as they thought," he said.

As for the bank earnings, Wells Fargo reported a 19% increase in profit, while JPMorgan posted a 31% gain. Wells Fargo's preferreds were all trading up, though JPMorgan was on the mixed side.

Fannie Mae and Freddie Mac were meantime in the news again as preferred stock holders filed a class-action lawsuit against the Treasury Department, alleging that its takeover of the two mortgage giants was unlawful.

That suit follows a similar one filed by hedge fund Perry Capital on Sunday.

But a trader said the news had "zero effect" on Fannie and Freddie paper, which was trading in mixed fashion at midday.

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