* JPMorgan revenue beat boosts stock; other banks also up
* Yum rises on strength in key China business
* Japan’s Line Corp soars in U.S. market debut
* Indexes up: Dow 0.69 pct, S&P 0.51 pct, Nasdaq 0.55 pct (Updates to early afternoon)
By Yashaswini Swamynathan and Tanya Agrawal
July 14 (Reuters) - The benchmark S&P 500 and the Dow scaled new highs yet again as JPMorgan’s strong results on Thursday set an upbeat mood for earnings and spurred a rally in financial stocks.
JPMorgan, the biggest U.S. bank by assets and the first among its peers to issue results, reported a much better-than-expected rise in quarterly revenue.
The bank’s shares rose 2.1 percent, while the S&P financial index rose 0.91 percent, leading the advancers among the 10 major S&P sectors.
The materials index gained 0.85 percent, boosted by Monsanto’s 3 percent increase after Bayer raised its offer for the seed company.
“We saw a significant beat from JPMorgan and that’s helping the psychology of the market,” said Art Hogan, chief market strategist at Wunderlich Securities in New York.
“With the weaker dollar helping commodities and better-than-expected economic data, the market is taking the path of least resistance with an upward bias.”
Expectations of more central bank stimulus has contributed to stocks’ gains. The view that the U.S. economy is on solid footing, as well as reduced political uncertainty in Britain and Japan, have also buoyed stocks.
At 12:34 p.m. ET (1634 GMT) the Dow Jones industrial average was up 127.1 points, or 0.69 percent, at 18,499.22, the S&P 500 was up 11.01 points, or 0.51 percent, at 2,163.44 and the Nasdaq Composite was up 27.55 points, or 0.55 percent, at 5,033.27.
The S&P 500 hit 2,168.99, its fourth straight intraday record peak, while the Dow hit 18,537.57 to mark its third straight intraday record high.
Hogan said the market needs to see earnings growth to sustain the rally. As the earnings season gathers steam, investors will parse reports to justify stock valuations.
Earnings at S&P 500 earnings are expected to have fallen 5 percent in the second quarter, but analysts expect steady growth through the rest of the year, according to StarMine.
That should calm investors nervous about the index trading near 17.3 times forward 12-month earnings, above the 10-year median of 14.7 times.
Results so far have been reassuring. KFC owner Yum Brands rose 3.6 percent to $88.86 after its key China business showed signs of strength.
Delta’s higher-than-expected quarterly profit sent its shares 2.7 percent higher and led to gain in other airline stocks.
Japanese messaging app operator Line Corp soared as much as 36 percent in their debut.
Strong economic data also helped the markets. Weekly jobless claims holding at lower levels and producer prices recording their biggest gain in a year in June.
Traders say if data continues to point to momentum in the economy, the Federal Reserve could raise rates later in the year.
Still, Atlanta Fed president Dennis Lockhart said the Fed should remain “cautious and patient” until the fallout of Brexit vote becomes clear.
Advancing issues outnumbered decliners on the NYSE by 1,834 to 1,061. On the Nasdaq, 1,680 issues rose and 1,045 fell.
The S&P 500 index showed 66 new 52-week highs and no new lows, while the Nasdaq recorded 115 new highs and 14 new lows. (Reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru; Editing by Savio D‘Souza)