WRAPUP 2-JPMorgan, Wells Fargo results soothe investors

(Adds details on JPMorgan merger appetite, updated shares)

By Jonathan Stempel and Joseph A. Giannone

NEW YORK, April 16 (Reuters) - JPMorgan Chase & Co (JPM.N: Quote, Profile, Research) and Wells Fargo & Co (WFC.N: Quote, Profile, Research) posted first-quarter results that soothed investors who had counted on the giant banks to handle the U.S. housing and credit crises better than many rivals.

Profit slumped 50 percent at JPMorgan, the third-largest U.S. bank and fell 11 percent at Wells Fargo, the fifth- largest. Bad loans soared and executives at both banks said market woes will likely deepen.

Yet the banks have had less exposure, relative to their sizes, to the risky mortgages and complex securities that have caused more than $200 billion of write-downs and credit losses at lenders worldwide since last summer. Wachovia Corp (WB.N: Quote, Profile, Research), the fourth-largest U.S. bank, posted a surprise loss Monday.

Richard Moroney, chief investment officer at Horizon Investment Services LLC in Chicago, said JPMorgan's and Wells Fargo's write-downs and losses "were in line with what investors expected. There is relief."

In afternoon trading, JPMorgan shares were up 5.1 percent, and Wells Fargo shares were up 4.1 percent. Broader indexes also rose, with the Standard & Poor's 500 .SPX up 1.6 percent and the Philadelphia KBW Bank Index .BKX rising 2.6 percent.

JPMORGAN

JPMorgan said quarterly profit fell to $2.37 billion, or 68 cents per share, from $4.79 billion, or $1.34, a year earlier.