Investors were looking to Bank of America and Citigroup for a fresh dose of earnings optimism on Friday, after strong reports from JPMorgan Chase and IBM raised hopes for a global recovery.

But Google's results failed to excite and there was also a note of caution from JPMorgan, which along with record investment banking and trading results reported a surge in consumer credit losses -- signaling more pain on Main Street.

Global stock markets have rallied this week, despite patchy economic data from the United States, as better-than-expected earnings from several big U.S. companies, led off by Goldman Sachs on Tuesday, raised hopes of better times ahead.

Earnings from U.S. banks have been upbeat, but there are concerns that the positive results could be limited to the second quarter, said Takahiko Murai, general manager of equities at Nozomi Securities.

Some institutions appear to hold significant bad loans and third-quarter results may not be as encouraging.

Bank of America and Citigroup were both due to report second-quarter results later on Friday, along with corporate bellwether General Electric.

Asian share markets extended this week's gains. Japan's Nikkei rallied for its fourth straight session to rise 0.6 percent on the day and just over 1 percent on the week.

The MSCI index of stocks elsewhere in the region rose 0.7 percent for a gain this week of more than 5 percent.

EARNINGS BOOST

Record investment banking fees fueled a 36 percent rise in quarterly profit for JPMorgan, topping Wall Street forecasts, though the bank warned that credit quality in consumer mortgages and credit cards was deteriorating faster than expected.

IBM reported a 13 percent fall in revenue after the U.S. stock market closed on Thursday, but outperformed expectations due to cost cutting and a shift to more profitable businesses.

The company sharply raised its full-year forecast as it benefited from focusing more on higher-margin businesses in software and services.

Google's quarterly profit beat expectations, but the weak economy and slump in advertising spending took a toll on revenue growth and the price of its search ads.

Shares of Google fell 3 percent after the results, which exceeded average forecasts but failed to live up to the heightened expectations of investors following Intel Corp's strong earnings earlier this week.

They did decently, but obviously it's not high enough for the Street, said Laxmi Poruri, an analyst at Primary Global Research.

DATA PATCHY

In Japan, members of the government's key economic panel said on Friday the Bank of Japan should work to stop prices falling further, as a deflationary spiral posed one of the biggest risks to recovery in the world's second-biggest economy.

Singapore, which rebounded strongly out of recession in the second quarter, posted a surprise 5.2 percent fall in June non-oil exports from the previous month.

Despite recent signs that Asian countries are recovering faster than their Western counterparts, exports remain a question mark hanging over the region's export-reliant economies, with demand still weak in key developed world markets.

Investors fretting over the health of the global economy had received a fillip from China on Thursday, with surprisingly strong economic growth of 7.9 percent in the second quarter, fueled by state spending and bank lending, reinforcing hopes it may lead the world out of its deepest recession in 80 years.

But the news from the developed world was less encouraging, with the Philadelphia Federal Reserve Bank reporting factory activity in the U.S. Mid-Atlantic region posted a worse-than-expected decline in July, contracting for the 10th consecutive month.

The Fed report showed the region's business activity index -- potentially the most closely watched U.S. regional manufacturing reading -- dropped to minus 7.5 in July from minus 2.2 in June, below analysts' forecasts for a reading of minus 5.0.

Other U.S. data was mixed, with the U.S. Labor Department showing the number of Americans lining up for jobless benefits last week had hit the lowest level since January, although the drop was seen as distorted by upheaval in the auto industry.

This is going to be a bumpy ride for the next six months for the economy. We are going to have volatility in the data because they are not all going to all turn at the same time, said Kurt Karl, chief U.S. economist at Swiss Re in New York.

(Writing by Alex Richardson; Editing by Neil Fullick )

Japan Nikkei 225 Ibm Investment