Wall Street surges as consumer and bank stocks gain
Wall Street`s main indexes surged on Friday as strong results for JPMorgan lifted financial stocks and robust retail sales data drove gains in consumer stocks.
The biggest U.S. 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.
Shares of JP Morgan rose 1.1 percent, helping lift the S&P financial index up 0.6 percent, after its fourth-quarter profit beat estimates.
"Their effective tax rate will be declining from 30 percent to 19 percent, that`s very meaningful. It should generate more than a billion dollars flowing into the bottom line," said Ron Weiner president and founder of RDM financial in Westport Connecticut.
Wells Fargo fell 0.8 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 11:08 a.m. ET (1608 GMT), the Dow Jones Industrial Average was up 194.76 points, or 0.76 percent, at 25,769.49 and the S&P 500 was up 13.89 points, or 0.50 percent, at 2,781.45.
The Nasdaq Composite was up 39.36 points, or 0.55 percent, at 7,251.14.
The S&P consumer discretionary index jumped 0.81 percent after an increase in retail sales showed households bought more goods and figures for the prior month were revised higher, suggesting the economy exited 2017 with strong momentum.
Amazon rose 1.8 percent and provided the biggest boost to the S&P and the Nasdaq. Home Depot rose 1.6 percent and Walmart rose 1 percent.
"A lot of these companies like Target and Home Depot are getting on with the internet ecosystem of e-commerce," said Josh Jalinski, president of Jalinski Advisory Group.
Sales at online retailers soared 1.2 percent.
Another data showed U.S. consumer prices recorded their biggest rise in 11 months in December on gains in the cost of rental accommodations and healthcare, bolstering expectations that inflation will accelerate this year.
Among other stocks, Facebook fell 4 percent after the company started changing the way it filters posts and videos on News Feed.
Advanced Micro Devices fell 2.66 percent after the chipmaker said its microprocessors are prone to both variants of the Spectre security flaw, days after saying its risk for one of them was "near zero".
Advancing issues outnumbered decliners on the NYSE by 1,557 to 1,220. On the Nasdaq, 1,864 issues rose and 920 fell.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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