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Visa rises, J.P. Morgan slips after hours

LOS ANGELES (MarketWatch) -- Shares of Visa Inc. and MasterCard Inc. each bounced higher Friday evening after the companies settled lawsuits brought by merchants. Meanwhile, banking stocks were mixed following dayside gains after better-than-expected quarterly figures from J.P. Morgan Chase & Co. and Wells Fargo & Co.

Stock in Visa (V) rose 2.8% to $127.55 and MasterCard (MA) moved 3.4% higher to $445.32. MasterCard said that it, along with Visa and various banks, have agreed to a memorandum of understanding to settle litigation under which MasterCard will pay $790 million in cash and give the merchants a 10 basis-point reduction in credit interchange rates for eight months.

MasterCard also agreed to modify its surcharge rule to allow U.S. merchants to levy checkout fees on credit cards. Visa agreed to similar conditions and its share of the total cash liability will be $4.4 billion.

As a result of the cash portion of the settlements, MasterCard said it will incur an additional $20 million pretax, second-quarter charge. The company recorded a $770 million charge in the fourth quarter of 2011.

Citigroup Inc. (C) shares rose 0.3% to $26.72, coming off a 5.4% climb in the regular session, while Morgan Stanley(MS) shares turned up 0.2% to $14.08. They closed the regular session up 3.7%.

Late-traded J.P. Morgan shares (JPM) edged down 0.3% at $35.98. They jumped 6% in the day session, with the company posting a nearly 9% fall in second-quarter profit of $4.96 billion that still beat Wall Street's targets. The market also appeared to find relief after the company's trading loss of $4.4 billion wasn't as large as expected. Read more about J.P. Morgan's quarterly results.

The company's trading losses now total $5.8 billion, which include previously announced sums, according to J.P. Morgan's chief financial officer.

Evening-traded shares of Wells Fargo (WFC) shed 0.1% at $33.87, slightly pulling back from their 3.2% rise earlier Friday after the bank's second-quarter profit rose to $4.62 billion, or 86 cents a share, from $3.95 billion in the year-ago quarter.

The advance in bank stocks helped lift the broader U.S. equity market on Friday. Read more in Market Snapshot.

The Dow Jones Industrial Average (DJIA) rallied 204 points, or 1.6%, to 12,777.09. The S&P 500 Index (SPX) finished 1.7% higher at 1,356.77 and the Nasdaq Composite Index (COMP) ended up 1.5% at 2,908.47.

Next week, investors will look for quarterly results from Google Inc. (GOOG) , Bank of America Corp. (BAC) and Intel Corp. (INTC) , among a number of other companies. See preview of Intel's second-quarter results.