Wall Street continued its rally on Friday with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks.
The S&P 500 and Nasdaq both registered their eight record closing highs out of the first nine trading days of 2018, while the Dow boasted its sixth closing high of the year.
JPMorgan, the biggest US lender by assets, said a US tax overhaul would help future profits by reducing its tax bill and stimulating more business. The bank’s shares rose 1.7 per cent.
Earnings for S&P 500 companies are expected to increase on an average by 12.1 per cent in the quarter, with profit for financial services companies likely to increase 13.2 per cent, reports Reuters.
BlackRock rose 3.3 per cent. The world’s largest asset manager reported profit that beat estimates as investors flooded into the relatively low-cost funds.
While Wells Fargo earnings beat expectations, its shares slipped 0.7 per cent after it set aside $3.25 billion in the fourth quarter to cover legal expenses related to probes into its mortgage and sales practices.
The Dow Jones Industrial Average rose 228.46 points, or 0.89 per cent, to 25,803.19, the S&P 500 gained 18.68 points, or 0.67 per cent, to 2,786.24 and the Nasdaq Composite added 49.29 points, or 0.68 per cent, to 7,261.06.
For the week, the S&P rose 1.6 per cent, compared with the Dow’s 2-percent rise and a 1.8-per cent advance in the Nasdaq.
The S&P consumer discretionary index jumped 1.3 per cent after retail sales data showed households bought more goods, suggesting the economy exited 2017 with strong momentum.
Amazon rose 2.2 per cent to breach $1,300 for the first time. It closed at $1,305.20.
The sector was also helped by a late-afternoon Bloomberg report that activist DE Shaw built a position in Lowe’s Companies, sending its shares up 5.3 per cent.
Bank stocks were helped by a rise in Treasury yields after underlying US consumer prices for December posted the biggest gain in 11 months, signalling a pickup in inflation.
The Treasury move helped push the utilities sector down 0.6 per cent, making it the weakest performer of the S&P 500’s 11 sectors.
