The S&P 500 and Dow hit record highs on Friday after Morgan Stanley completed quarterly earnings reports from major US banks with earnings gains, while optimism about a solid economic recovery put the main indices on track for weekly gains.
Nine of the 11 S&P indices traded higher, with only the communications services (.SPLRCL) and information technology (.SPLRCT) indices falling lower after outperforming in the previous session.
Wall Street’s three major indices rose this month due to positive economic data, a solid start to the first quarter corporate earnings season and the Federal Reserve’s pledge to keep interest rates low despite higher inflation, boosting demand, particularly to richly valued technology stocks.
Morgan Stanley (MS.N) reported a 150% increase in quarterly earnings on Friday, joining JPMorgan Chase & Co (JPM.N), Goldman Sachs Group Inc (GS.N) and Bank of America (BAC.N) strengthening hopes for a speedy economic recovery.
Still, the investment bank’s shares fell 1.2% as it also revealed a loss of nearly $ 1 billion from the collapse of the private fund Archegos. read more
Shares of JPMorgan, Goldman Sachs, Bank of America, Citigroup Inc (CN) and Wells Fargo and Co (WFC.N) were up 1.6%.
“So far, the financial sector has reported very strong earnings and that could be key to this earnings season,” said Peter Cardillo, chief market economist at Spartan Capital Securities in New York.
“There seems to be a new burst of enthusiasm, also because we have a drop in (bond) interest rates. It’s certainly useful in terms of risk.”
Global equities also hit record highs as China’s GDP grew at a record 18.3% growth in the first quarter. A separate set of figures on Thursday showed that US retail sales rose the most in 10 months in March and weekly unemployment claims fell for the week ending April 10.
The benchmark S&P 500 (.SPX) and the blue-chip Dow (.DJI) are on track for their fourth straight week of gains, while the technology-heavy Nasdaq (.IXIC) is about one percent below its own all-time high. .
At 9:44 a.m. ET, the Dow Jones Industrial Average (.DJI) was up 97.72 points or 0.29% to 34,133.71, the S&P 500 (.SPX) was up 2.95 points or 0.07% to 4,173, 37, and the Nasdaq Composite (.IXIC) fell 47.05 points, or 0.34%, to 13,991.71.
Tech giants Apple Inc (AAPL.O), Amazon.com Inc (AMZN.O), Tesla Inc (TSLA.O) Microsoft Corp (MSFT.O), which led Wall Street’s recovery from the coronavirus-caused crash last year, slipped between 0.4% and 1.5%.
Bitcoin-related stocks including Riot Blockchain (RIOT.O) and Marathon Digital (MARA.O) plunged 9% after Turkey banned the use of cryptocurrencies and crypto assets to purchase goods and services. read more
Early issues were in the minority at a ratio of 1.32 to 1 on the NYSE, while the number of declining issues was greater than claims at a ratio of 1.57 to 1 on the Nasdaq.
The S&P Index recorded 136 new highs in 52 weeks and no new low, while the Nasdaq recorded 121 new highs and 64 new lows.
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