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Stock Market Today: Stocks Mixed, Wells Fargo Meets Estimates, Portugal Fears Subside

NEW YORK (TheStreet) -- U.S. benchmark stock indices were mixed on Friday, with the Dow Jones Industrial Average and S&P 500 slipping despite banking giant Wells Fargo  (WFC - Get Report) meeting earnings expectations and European markets stabilizing.

The Dow was down 0.14% to 16,891.3. The S&P 500 was sliding 0.12% to 1,962.29. The Nasdaq was up 0.14% to 4,402.29, buoyed by gains in Internet names such as Amazon (AMZN), up 4.9%, eBay (EBAY), up 2.4%, and Google (GOOGL), up 1%.

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Wells Fargo, the nation's largest mortgage lender, posted in-line second-quarter earnings on Friday of $1.01 a share on better-than-expected revenue of $21.1 billion. The Wall Street revenue consensus target was $20.84 billion. The banking giant reported total average loans of $831 billion, up $32.7 billion or 4% from the 2013 second quarter and noted that it increased its quarterly common stock dividend by 17% to 35 cents a share in the second quarter. Shares were down 0.6% to $51.50.

International markets tumbled Thursday, with fears sparked by a missed debt service payment by a parent company of Portugal's Banco Espirito Santo. Portugal's second-largest bank by market value on late Thursday reassured the markets that potential losses resulting from its exposure to Espirito Santo Group will not compromise its compliance with regulatory capital requirements. Currently it has an exposure of 1.18 billion euros to Grupo Espirito Santo.

U.S. markets climbed out of session lows by market close in the previous session, but stayed in the red for the day.

"The equity market remains remarkably resilient, in our view, with the S&P 500 up 6.2% so far this year," noted Gina Martin Adams, senior analyst at Wells Fargo Securities. "As the market continues to normalize with the deceleration in Fed intervention, we continue to believe dispersion among sectors should rise," she added. Adams sees breakouts in integrated the oil and gas, and tobacco sectors; a breakdown in banks; and a break-up in Internet stocks.

With the markets steadfast in the face of contagion fears, investors are now looking to second-quarter earnings season for the next set of potential catalysts. S&P Capital IQ reported that S&P 500 earnings growth is expected to come in at 6.5% year ove -year, with EPS of $28.67 for the second quarter. Only 25 companies have reported earnings results for the second quarter so far, with 16 of those companies beating analysts' estimates, seven missing, and two meeting.

Chevron (CVX - Get Report) said that earnings for the second quarter are expected to rise from the first quarter because of gains on asset sales. Shares were sliding 1.5% to $128.30.

Other companies taking the spotlight include Alibaba, Reynolds American (RAI) and Lorillard (LO), Amazon.com (AMZN), and Gap (GPS).

Alibaba, the Chinese e-commerce company, plans to launch its IPO process as soon as the end of the month, people familiar with the matter told The Wall Street Journal. Reynolds American and Lorillard are closing in on a complex merger. Amazon.com is seeking permission from U.S. regulators to test its delivery drones near Seattle, Reuters reported. Gap was slipping after reporting that its same-store sales dipped 2% last month, missing expectations of a 0.7% increase.

-- By Andrea Tse and Keris Alison Lahiff in New York

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