Wall Street rises as bank stocks gain after data on US economy
US stocks were higher in morning trading on Thursday, as bank stocks gained after data showed that the domestic economy grew at a faster pace in the fourth-quarter than previously estimated.
Gross domestic product increased 2.1%, compared with the previously reported 1.9%, the Commerce Department said.
Bank of America, Citigroup and J.P. Morgan were all up between 0.8%1.6%, while Goldman Sachs’s 1.4% rise helped lift the Dow.
The market has been range bound over the past few days as investors look for new catalysts and assess the impact of Republicans’ failure to pass a health-care bill on tax reform and the rest of President Donald Trump’s pro-growth agenda, hopes for which have helped drive stocks to record highs.
But the rally may be near its peak, according to a Reuters poll of strategists, who forecast US shares will gain less than 3% between now and yearend. The S&P had risen 10.3% since the US election through Wednesday’s close.
The rapid climb in equities has raised concerns regarding valuations, with the S&P 500 trading at nearly 18 times earnings estimates for the next 12 months against its long-term average of 15 times.
The market will be looking at quarterly earnings to see if the lofty valuations can be supported. First-quarter earnings for S&P 500 companies are expected to rise 10.1%, according to Thomson Reuters I/B/E/S.
The Dow Jones Industrial Average was up 82.9 points, or 0.4%, at 20,742.22, the S&P 500 was up 7.54 points, or 0.31%, at 2,368.67, and the Nasdaq Composite was up 15.52 points, or 0.26%, at 5,913.06.
Eight of the 11 major S&P sectors were higher, with the financial index’s 0.93% rise leading the advancers. Investors also were waiting for comments from a host of Federal Reserve officials on clues for the path forward for interest-rate hikes.
The S&P 500 index showed 14 new 52-week highs and no new lows, while the Nasdaq recorded 67 new highs and 11 new lows.