Friday Bank Rally Lifts S&P 500 to Weekly Gain Amid Trump Orders

  • Directives on regulations rekindle benchmark’s advance
  • Earnings more than halfway done as most companies post growth

A one-day rally in financial stocks on Friday helped push U.S. equities into positive territory for the week after the S&P 500 Index spent most of the period fluctuating between gains and losses against the backdrop of a slew of executive orders by President Donald Trump.

The S&P 500 added 0.1 percent to 2,297.42 on the week as the Dow Jones Industrial Average lost 0.1 percent to 20,071.46. Both gauges trailed the Russell 2000 Index as small-cap shares added 0.5 percent for the fourth gain in five weeks.

While health-care stocks had the biggest five-day gain with a 2.4 percent advance, it was a 2 percent rally in financial companies that pushed the S&P 500 into positive territory late Friday after Trump signed directives aimed at reducing regulation on banks and examining the Dodd-Frank rule

Equities also got a lift Friday after U.S. Labor Department data showed employers added the most workers in four months, stoking enthusiasm in the economy that was tempered by hourly earnings numbers, which showed growth of 2.5 percent year-over-year, the weakest since August.

The Federal Reserve will probably “interpret the labor market condition as having moderately more slack near term,” Tim Hopper, chief economist at TIAA Investments, said in a research note Friday. “This gives them room to forestall a rate hike in March.”

Investors continue to watch corporate earnings. With more than half of S&P 500 companies having reported, profits are beating expectations by an average 3.3 percent, even as revenue figures fall in line with analyst projections. Earnings are up 5.5 percent on average, with eight of 11 industry groups posting gains.

Shares of phone companies had the worst week in three months, dropping 1.9 percent as a group. Frontier Communications Corp. lost 3.4 percent and Verizon Communications Inc. declined 2.1 percent. Despite the fourth week of gains in oil this year, energy stocks lost 1.2 percent as declines in Range Resources Corp. and Transocean Ltd weighed on the group.

(An earlier version of this story corrected the number of weekly gains in oil in final paragraph.)
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