Small caps slightly higher on better earnings

After opening higher today, small-cap stocks were mostly higher at mid-session, in part due to better-than expected earnings reports from large caps. Many key players reported weak outlooks, though, that put pressure on small caps. Strong economic data kept investors cautiously optimistic that the U.S. economy could start to crawl out of the red.

At 1:06 p.m. ET, the Russell 2000 (NYSE:IWM) was up 0.07, or 0.01%, at 686.82.

With earnings season well underway, large-cap stocks were driving the market — though not altogether forward. JPMorgan Chase & Co. (NYSE:JPM) reported earnings that beat estimates by more than 22%. By market value, JPMorgan is the largest U.S. bank. JPMorgan’s jump helped continue the rally of financial stocks after days of bleak news about the U.S. banking industry. On Wednesday Wells Fargo & Co. (NYSE:WFC) announced an increase of 10% in its dividend after posting solid results.

On the downside, The Coca-Cola Company (NYSE:KO) dropped 4% on below-average volume after reporting its second-quarter profits had dropped 23% from a year ago. The beverage retailer said its weak earnings were due to lowered soda demand from U.S. customers. News of the weak earnings dragged down shares of consumer goods. Internet retailer eBay Inc. (Nasdaq:EBAY) also tumbled 14% after giving an unimpressive outlook.

Government reports showed weekly jobless claims rose to 366,000 this week, a figure that was well below expectations for a jump to 380,000. Housing starts rose 9.1% while analysts had been expecting a drop of 1.5%. Despite this, single-family home construction sunk 5.3% in June to a 17-year low while construction of multi-family homes skyrocketed 42.5% from the same month a year ago.

For the first time in days, the U.S. Federal Reserve and crude oil prices weren’t in the spotlight. Crude oil was lower overnight and was down at mid-session to $133.87 per barrel, a far cry from the records highs over $147 seen earlier this . . .

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