October 20, 2017 04:24 PM
Technology companies and banks led U.S. stocks higher in late-afternoon trading Friday, placing the market on course to extend its gains for the week. Investors cheered a crop of strong company earnings. They also drew encouragement from the Senate's passage of a budget bill, a move expected to ease the path for the White House's tax cut proposal. Consumer products companies lagged the most.
KEEPING SCORE: The Standard & Poor's 500 index rose 11 points, or 0.5 percent, to 2,573 as of 3:10 p.m. Eastern time. The Dow Jones industrial average gained 130 points, or 0.6 percent, to 23,293. The Nasdaq composite added 27 points, or 0.4 percent, to 6,632. The Russell 2000 index of smaller-company stocks picked up 7 points, or 0.5 percent, to 1,509. The S&P 500 and Dow hit their latest record highs on Thursday.
THE QUOTE: "The market has now increased its expectations of tax reform or a cut," said Mike Baele, managing director at U.S. Bank Private Wealth Management. "The combination of strong economic data, good earnings and now the prospect of fiscal stimulus is really helping to support equities."
TAX CUT NEXT?: The passing of a $4 trillion budget resolution in the Senate stoked hopes on Wall Street that President Donald Trump's tax reform package will be enacted. The measure, which passed narrowly late Thursday and now goes to the House of Representatives, sets the stage for tax legislation later this year that could pass through the Senate without fear of a filibuster by Democrats. It also adds $1.5 trillion to the deficit over the next 10 years. Investors' expectations that such a plan would slash the corporate tax rate, among other business-friendly changes, helped fuel Wall Street's gains this year.
BIG GAINER: Technology sector companies led the market higher. PayPal Holdings climbed 4.7 percent after the payment technology company reported big gains in new users and transactions. The stock rose $3.16 to $70.41. Alliance Data Systems added $6.59, or 2.8 percent, to $239.39.
BULLISH ON BANKS: Investors bid up shares in banks as bond yields surged. Higher bond yields allow banks to charge higher interest rates on mortgages and other loans. Synchrony Financial gained $1.24, or 3.9 percent, to $32.95. Citizens Financial Group picked up 84 cents, or 2.3 percent, to $38.28. Both also reported higher quarterly earnings than analysts had been expecting.
BEST FOOT FORWARD: Skechers USA soared 39.6 percent after the shoe company reported that its profit and sales were stronger than analysts expected. The stock rose $9.51 to $33.54.
NOT GOOD ENOUGH: Procter & Gamble slid 4.3 percent after the consumer products giant posted solid fiscal first-quarter results, but analysts questioned its sales. Its shares dropped $3.92 to $87.68.
CASHED OUT: NCR gave up 10.7 percent after the company cut its annual revenue forecast and said orders for ATMs were weaker than it expected. Its shares lost $3.95 to $33.10.
BONDS YIELDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.38 percent from 2.32 percent late Thursday.
ENERGY: Oil prices closed higher after wavering between small gains and losses for much of the day. Benchmark U.S. crude added 18 cents to settle at $51.47 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 52 cents to $57.75 a barrel in London. In other energy trading, wholesale gasoline rose 3 cents to $1.68 a gallon. Heating oil picked up 3 cents to $1.81 a gallon. Natural gas gained 4 cents to $2.92 per 1,000 cubic feet.
METALS: Gold fell $9.50 to $1,280.50 an ounce. Silver lost 18 cents to $17.09 an ounce. Copper was little changed at $3.17 a pound.
CURRENCIES: The dollar strengthened to 113.51 yen from 112.65 yen on Thursday. The euro fell to $1.1779 from $1.1830.
MARKETS OVERSEAS: In Europe, Germany's DAX was flat, while the CAC 40 in France added 0.1 percent. The FTSE 100 index of leading British shares was flat. In Asia, Japan's benchmark Nikkei 225 finished less than 0.1 percent higher ahead of parliamentary elections on Sunday. Prime Minister Shinzo Abe's party is expected to retain a comfortable lead. Elsewhere, South Korea's Kospi added 0.7 percent, while Hong Kong's Hang Seng index rebounded 1.2 percent after a big sell-off the day before.
By ALEX VEIGA
Updated: October 20, 2017 04:24 PM
(Copyright 2017 by The Associated Press. All Rights Reserved.)