NEW YORK: Wall Street stocks surged to another round of records Friday as earnings season kicked off amid optimism ignited by the US tax reform.
All three major indices again ended at records, with the Dow Jones Industrial Average up 0.9 percent at the closing bell to 25,803.19.
The broad-based S&P 500 finished at 2,786.24, jumping 0.7 percent from Thursday’s record, as did the tech-rich Nasdaq Composite Index which closed the week at 7,261.06.
Earnings from big banks were mixed, with JPMorgan Chase rising 1.7 percent after beating expectations, even as profits were hit by one-time effects of the tax law changes. But JPMorgan expressed confidence the tax changes would boost results long-term.
Wells Fargo shed 0.7 percent as fourth-quarter earnings rose 17 percent to $6.2 billion, but were marred by $3.3 billion in litigation costs, some in the aftermath of the fake accounts scandal.
Many analysts believe the market has not yet priced in the higher profits that the corporate tax cut is expected to generate.
“Over time they will have to revise their estimates for earnings higher,” said Hugh Johnson of Hugh Johnson Advisors.
Friday’s gains also followed a strong December US retail sales report, which lifted annual retail sales by 4.2 percent, the biggest increase since 2014.
Some consumer-oriented companies enjoyed big gains, including home-improvement retailer Lowe’s, up 5.3 percent, big-box store Target, up 3.8 percent, and discount retailer Dollar Tree, up 3.1 percent.
Most large technology shares also rose, with Apple, Amazon, Google-parent Alphabet and Microsoft all winning one percent or more.
But Facebook sank 4.5 percent after announcing a plan to update its newsfeed to emphasize posts from friends and family over other content.
The shift prompted fears it could drive away advertisers if people spend less time on the social network.
Source: Brecorder.com
