U.S stocks gain on earnings, Fed uncertainty weighs; Dow up 0.02%

U.S. stocks finished Friday higher after second-quarter earnings out of the financial sector beat expectations, though remaining uncertainty as to when the Federal Reserve will scale back stimulus measures hampered gains.

Stimulus programs such as the Fed's monthly USD85 billion bond-buying program push up stocks by keeping interest rates low.

At the close of U.S. trading, the Dow Jones Industrial Average finished up 0.02%, the S&P 500 index ended up 0.31%, while the Nasdaq Composite index rose 0.61%.

U.S. financial institutions JPMorgan Chase & Co. and Wells Fargo & Co. reported earnings earlier that beat Wall Street expectations, which sent stock prices rising.

Wells Fargo reported earnings of USD0.98 a share, beating forecasts for USD0.93 a share, due in part to a stronger housing market.

JPMorgan reported earnings of USD1.60 a share, well above consensus forecasts for USD1.44 a share.

Monetary uncertainty dampened the rally, however.

Fed Chairman Ben Bernanke said Wednesday evening that economic data suggest that the U.S. economy still requires highly accommodative monetary policies, though on Friday, Federal Reserve Bank of Philadelphia President Charles Plosser said such policies should begin to wind down this year.

"The first step is to wind down our asset purchases by the end of the year in a gradual and predictable manner," Plosser said earlier Friday. 

"As I said, I see little if any benefit from these purchases, and growing costs."

Also dampening stock gains, logistics giant UPS earlier cut its 2013 earnings forecasts on concerns the U.S. economy still battles headwinds. 

Leading Dow Jones Industrial Average performers included Bank of America, up 1.85%, American Express, also up 1.85%, and The Travelers Companies, up 1.81%.

The Dow Jones Industrial Average's worst performers included Boeing, down 4.59%, Verizon Communications, down 1.52%, and General Electric, down 0.75%.

European indices, meanwhile, finished mixed.

After the close of European trade, the EURO STOXX 50 fell 0.24%, France's CAC 40 fell 0.36%, while Germany's DAX 30 finished up 0.66%. Meanwhile, in the U.K. the FTSE 100 finished up 0.02%.