Technology stocks boost Wall Street to record highs
A surge in technology stocks sent the major Wall Street indexes to record highs on Friday, but a drop in health insurers kept the rally in check, while banks were little changed after mixed reports from Bank of America and Wells Fargo.
Bank of America, the second-biggest US bank by assets, rose 1.10 per cent after the lender’s profit topped estimates due to higher interest rates and a drop in costs.
But Wells Fargo tumbled more than three per cent, set for its biggest drop since mid-April, after reporting lower thanexpected revenue for the fourth straight quarter due to a decline in mortgage banking revenue.
The reports from the Wall Street banks kicked off the third-quarter earnings season, with investors hoping profit growth will help justify valuations after a rally that has sent the S&P 500 up about 14 per cent so far this year.
“Because of the reach that financials have into the economy, the market likes to see its what earnings are reflecting, be it on loan growth, its really trying to look at the health of the economy,” Nana Adae, global investment specialist, JP Morgan Private Bank in Chicago.
The market got a boost earlier in the day after data showed retail sales surged by the most in 2-1/2 years in September, while consumer prices recorded their biggest increase in eight months as Hurricanes Harvey and Irma boosted demand.
Still, the data was below estimates on both counts and failed to move year- on-year core inflation for the fifth month, putting no new pressure on the Federal Reserve to tighten borrowing costs.
At 11:03 am ET (1503 GMT), the Dow Jones Industrial Average was up 34.06 points, or 0.15 per cent, at 22,875.07, the S&P 500 was up 5.42 points, or 0.21 per cent, at 2,556.35 and the Nasdaq Composite was up 20.14 points, or 0.31 per cent, at 6,611.65. That set the S&P and the Dow on track to close higher for the fifth straight week and the Nasdaq for the third. Seven of the 11 major S&P sectors were higher on the day, led by 0.51 per cent gain in the technology index.