US stocks end at records again, extending rally

US stocks end at records again, extending rally

NYSE traders
Traders and financial professional work ahead of the closing bell on the floor of the New York Stock Exchange. (Photo: Drew Angerer/Getty Images North Aerica/AFP)

NEW YORK: Wall Street stocks surged to another round of records on Friday (Jan 12) 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 228.46 points (0.89 per cent) at the closing bell to 25,803.19.

The broad-based S&P 500 finished at 2,786.24, jumping 18.68 points (0.67 per cent) from Thursday's record, while the tech-rich Nasdaq Composite Index rose 49.28 points (0.68 per cent) to close the week at 7,261.06.

Earnings from big banks were mixed, with JPMorgan Chase rising 1.7 per cent 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 per cent as fourth-quarter earnings rose 17 per cent to US$6.2 billion, but were marred by US$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 per cent, the biggest increase since 2014.

Some consumer-oriented companies enjoyed big gains, including home-improvement retailer Lowe's, up 5.3 per cent, big-box store Target, up 3.8 per cent, and discount retailer Dollar Tree, up 3.1 per cent.

Most large technology shares also rose, with Apple, Amazon, Google-parent Alphabet and Microsoft all winning one per cent or more.

But Facebook sank 4.5 per cent after announcing a plan to update its newsfeed to emphasise 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: AFP/ec