Wall Street higher as consumer and bank stocks gain
12 Jan, 2018
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(Reuters) – Wall Street’s main indexes were higher on Friday as strong December retail sales data drove gains in consumer stocks and bank results pushed up the financial sector.
The S&P consumer discretionary index .SPLRCD jumped 0.55 percent after data showed households bought a range of goods and figures for the prior month were revised higher, suggesting the economy exited 2017 with strong momentum.
Amazon (AMZN.O) rose 1.3 percent and provided the biggest boost to the S&P and the Nasdaq.
JPMorgan Chase & Co (JPM.N) rose 0.5 percent in choppy trading after the biggest U.S. bank by assets reported profit that beat estimates, benefiting from higher interest rates and loan growth.
Wells Fargo (WFC.N) fell 0.7 percent as the bank set aside more money in fourth quarter to cover expenses related to probes into its mortgage and sales practices.
The S&P financial index .SPSY rose 0.5 percent.
“I don’t think you would’ve seen a big pop in bank stocks, no one’s surprised by these numbers,” said Ron Weiner president and founder of RDM financial in Westport Connecticut.
While tax-related costs are expected to weigh on banks’ earnings, they are expected to benefit in the long run from lower tax burden.
Earnings for S&P 500 companies are expected to increase on an average by 11.8 percent in the quarter with profit for financial services companies growing as much, according to Thomson Reuters I/B/E/S.
The Nasdaq Composite .IXIC was up 5.27 points, or 0.07 percent, at 7,217.04. The index was dragged by a 4 percent fall in Facebook’s (FB.O) shares after the company started changing the way it filters posts and videos on News Feed.
Advanced Micro Devices (AMD.O) fell 2.66 percent after the company 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”.
Futures fell briefly on Friday after consumer prices for December posted their biggest gains in 11 months, raising expectations of inflation gaining momentum this year.
The Labor Department’s Consumer Price Index, which excludes the volatile food and energy components, rose 0.3 percent last month. Economists polled by Reuters had forecast core CPI rising 0.2 percent.
Core CPI increased 1.8 percent in the 12 months through December, picking up from 1.7 percent in November.
Advancing issues outnumbered decliners on the NYSE by 1,462 to 1,035. On the Nasdaq, 1,445 issues rose and 969 fell.
Reporting by Sruthi Shankar in Bengaluru; Editing by Arun Koyyur
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