(Reuters) - Consumer sentiment picked up more steam in early January, rising to the highest in eight months as Americans grew more optimistic about job prospects, a survey released on Friday showed. Separate data earlier in the day showed the trade deficit widened in November to its largest in five months, suggesting imports weighed on economic growth a bit more than expected during the fourth quarter.

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(Reuters) - The drag of the European debt crisis on trading and corporate deal-making pulled down JPMorgan Chase & Co's profit, sending bank stocks tumbling on Friday, but the largest U.S. bank by assets said the domestic economy was strengthening. Chief Executive Jamie Dimon said the New York-based bank was seeing signs of improvement in credit quality as well as loan demand from corporations and consumers in the United States.

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(Reuters) - Standard & Poor's is set to downgrade the credit ratings of several euro zone countries later on Friday, but not those of Germany and the Netherlands, a senior euro zone government source said. Another source confirmed "several" countries would be hit. French TV, citing a government source, said France's credit rating would be downgraded and another source said Slovakia, the euro zone's second poorest country currently rated A+ by S&P, would suffer the same fate.

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(Reuters) - The trade deficit widened in November to its largest in five months, suggesting imports weighed on economic growth a bit more than expected during the fourth quarter. The trade gap totaled $47.8 billion, exceeding analysts' forecast of a $45.0 billion deficit, Commerce Department data showed on Friday.

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(Reuters) - Wall Street retreated on Thursday following a three-day rally after weaker U.S. economic data and comments from the European Central Bank chief that painted a mixed view on the region's debt crisis. Energy shares fell after Chevron Corp (CVX.N), the second largest U.S. oil company, said fourth-quarter profit would be significantly below the previous quarter. Chevron was off 2.5 percent to $105.07, while the S&P energy sector .GSPE fell 1 percent, the biggest decliner among S&P groups.

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(Reuters) - Retail sales rose at the weakest pace in seven months in December and first-time claims for jobless benefits moved higher last week, signs the economic recovery remains shaky despite a pick-up in growth. Total retail sales increased 0.1 percent after rising by an upwardly revised 0.4 percent in November, the Commerce Department said on Thursday.

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(Reuters) - Treasury Secretary Timothy Geithner said on Thursday that key emerging-market nations must let their currencies rise in value in order permit more stable global growth. In an interview in Tokyo with Japanese broadcaster NHK, Geithner appeared to refer to China when he spoke about the role of emerging market countries in creating a more stable monetary system.

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(Reuters) - The European Central Bank's flood of cheap three-year money is helping the euro zone's banking system substantially and supporting confidence in the bloc's economy which is showing some signs of stabilization, its president said on Thursday. The ECB left interest rates on hold, pausing to assess the impact of back-to-back cuts and a slew of other measures it unleashed late last year that are showing signs of helping fight the euro zone debt crisis.

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(Reuters) - Home goods retailer Williams-Sonoma Inc (WSM.N) said heavy discounting to attract bargain-hungry holiday shoppers would eat into its fourth-quarter earnings, sending its shares slipping as much as 15 percent. Williams-Sonoma also outlined plans to return money to shareholders and shore up its stock, but the news failed to soften the blow of the weak outlook.

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(Reuters) - U.S. stocks edged lower on Wednesday after hitting a five-month high in the prior session as a warning about further weakness in the euro kept investors jittery. The link between U.S. equities and the movement of the embattled euro became strong toward the end of 2011 as traders fretted about possible government defaults in the euro zone.

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