Wall St. edges up after JPMorgan, J&J results

NEW YORK (Reuters) - U.S. stocks rose modestly on Tuesday as investors digested the initial major earnings of the first-quarter reporting season, which showed some weakness despite companies topping lowered expectations.

JPMorgan Chase & Co posted stronger-than-expected earnings growth, helped by a rebound in fixed-income trading. Revenue rose 5 percent. The stock rose 1.8 percent to $63.22 as the S&P 500's biggest percentage gainer. Wells Fargo & Co dipped 0.8 percent to $54.15 despite also reporting first-quarter earnings that topped expectations.

Johnson & Johnson reported adjusted earnings that topped expectations, but the consumer products giant also cut tits full-year forecast, citing the impact of a strong dollar. The stock - which, along with JPMorgan, is a Dow component - rose 0.6 percent to $101.16.

"All the companies in the early going have beaten expectations, which makes me think that forecasts got too pessimistic," said Michael Arone, the Boston-based chief investment strategist for State Street Global Advisors? U.S. intermediary business. "The market has priced in too much of the expected headwinds, which should help us see some positive surprises."

First-quarter profits for S&P 500 companies are seen falling 2.9 percent, according to Thomson Reuters data. On Jan. 1, analysts were looking for growth of 5.3 percent. The drop in expectations could mean that companies can more easily top a lowered bar, but the trend of the season remains unclear with fewer than 10 percent of the S&P having reported. This week will see a number of major companies report, including Intel Corp after the market closes on Tuesday.

Late Monday, Norfolk Southern Corp forecast a surprise drop in its first-quarter earnings and revenue, sending shares down 4.2 percent to $100.34.

Nokia Oyj is in talks to buy Alcatel-Lucent SA , a deal that would combine the telecommunications industry's two weakest players but could pose challenges in cutting costs and overcoming political opposition.

U.S. shares of Nokia fell 3.1 percent to $8.04 while Alcatel rose 7.1 percent to $4.66.

U.S. retail sales posted their largest gain in a year since March, though the rise was slightly less than had been anticipated. Separately, U.S. producer prices rose in March after four straight months of declines.

The Dow Jones industrial average <.DJI> rose 53.62 points, or 0.3 percent, to 18,030.66, the S&P 500 <.SPX> gained 3.29 points, or 0.16 percent, to 2,095.72 and the Nasdaq Composite <.IXIC> added 6.51 points, or 0.13 percent, to 4,994.76.

Advancing issues outnumbered declining ones on the NYSE by 1,727 to 887, for a 1.95-to-1 ratio; on the Nasdaq, 1,200 issues rose and 923 fell, for a 1.30-to-1 ratio favoring advancers.

The S&P 500 posted 2 new 52-week highs and no new lows; the Nasdaq Composite recorded 28 new highs and 6 new lows.

(Editing by Jeffrey Benkoe and Nick Zieminski)