* Consumer discretionary is top gainer, utilities biggest
* Retail sales rise 0.4 percent; core sales up 0.3 percent
* Rising rents, healthcare costs boost underlying U.S.
* Indexes up: Dow 0.79 pct, S&P 0.61 pct, Nasdaq 0.61 pct
(Updates to close, adds commentary)
By Sinead Carew
Jan 12 (Reuters) - Wall Street continued its rally on Friday
with record closing highs as the fourth-quarter earnings season
kicked off with solid results from banks and robust retail sales
drove investor optimism about economic growth.
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 U.S. lender by assets, said a
U.S. tax overhaul would help future profits by reducing its tax
bill and stimulating more business. The bank's shares rose 1.7
"The fact all the big money center banks beat on the bottom
line is a good omen for the rest of the earnings season," said
William Lynch, director of investments at Hinsdale Associates,
in Hinsdale, Illinois.
Investors were also hopeful 2018 financial forecasts from
U.S. companies would beat Wall Street estimates as many analysts
may not have tax savings fully reflected in their models as the
tax bill was signed into law so late in December.
"I don't know how much of that is priced in right now," said
Stephen Massocca, senior vice president at Wedbush Securities in
San Francisco. "It seems like the economy is going OK, inflation
is kind of nonexistent right now, wage growth is not an issue
for most income statements, so what's not to like here."
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.
BlackRock rose 3.3 percent. 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 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.
The Dow Jones Industrial Average rose 228.46 points,
or 0.89 percent, to 25,803.19, the S&P 500 gained 18.68
points, or 0.67 percent, to 2,786.24 and the Nasdaq Composite
added 49.29 points, or 0.68 percent, to 7,261.06.
For the week, the S&P rose 1.6 percent, compared with the
Dow's 2-percent rise and a 1.8-percent advance in the Nasdaq.
The S&P consumer discretionary index jumped 1.3
percent after retail sales data showed households bought more
goods, suggesting the economy exited 2017 with strong momentum.
Amazon rose 2.2 percent 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 D.E. Shaw built a position in Lowe's
Companies, sending its shares up 5.3 percent.
Bank stocks were helped by a rise in Treasury yields after
underlying U.S. consumer prices for December posted the biggest
gain in 11 months, signaling a pickup in inflation.
The Treasury move helped push the utilities sector
down 0.6 percent, making it the weakest performer of the S&P
500's 11 sectors.
Advancing issues outnumbered declining ones on the NYSE by a
1.17-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favored advancers.
The S&P 500 posted 164 new 52-week highs and 12 new lows;
the Nasdaq Composite recorded 222 new highs and 14 new lows.
Volume so far on U.S. exchanges was 6.88 billion shares,
above the 6.39 billion average for the full session over the
last 20 trading days.
(Additional reporting by Caroline Valetkevitch and April Joyner
in New York, Sruthi Shankar in Bengaluru; Editing by Arun Koyyur
and Nick Zieminski)
First Published: 2018-01-12 14:40:28
Updated 2018-01-12 23:31:13
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