Wall Street rose to record highs on Friday as fourth-quarter earnings season kicked off with solid results from JPMorgan and BlackRock and robust retail sales drove gains for consumer stocks. JPMorgan, the biggest US lender by assets, said the new tax law would help future profits by not only reducing the amount it pays the federal government but also by stimulating more business. The bank's shares rose more than 1 percent.
BlackRock rose 3 percent after the world's largest asset manager reported profit that beat estimates as investors flooded into the relatively low-cost funds. Bank stocks also gained from a rise in Treasury yields after underlying US consumer prices for December posted their biggest gain in 11 months, signaling a pickup in inflation.
"There is optimism that earnings season is going to be relatively good and belief that the overall economy is continuing to get healthier," said Robert Pavlik, chief investment strategist at SlateStone Wealth in New York. "Interest rates are moving up, but not to the extent that it is causing much concern. The CPI data that came in is a good level to be in an economy that seems to be expanding."
Wells Fargo slipped 0.3 percent after it set aside $3.25 billion in the fourth quarter to cover legal expenses related to probes into its mortgage and sales practices. Earnings for S&P 500 companies are expected to increase on an average by 12.1 percent in the quarter with profit for financial services companies likely to increase 13.2 percent, according to Thomson Reuters I/B/E/S.
At 12:47 pm ET (1747 GMT), the Dow Jones Industrial Average was up 166.54 points, or 0.65 percent, at 25,741.27 and the S&P 500 was up 13.93 points, or 0.50 percent, at 2,781.49. The Nasdaq Composite was up 42.49 points, or 0.59 percent, at 7,254.26.
The S&P consumer discretionary index jumped 0.78 percent after an increase in retail sales showed households bought more goods, suggesting the economy exited 2017 with strong momentum. Amazon rose 1.89 percent to breach $1,300 for the first time, while Home Depot rose 1 percent and Walmart 0.6 percent.
Comments
Comments are closed.