Trump Rally Inches Forward as Banks Lead Fourth Weekly AdvanceBy
U.S. stocks climbed for the fourth straight week as financial companies rallied, economic data beat expectations and corporate earnings continued to show profit growth.
Banks posted their biggest-five day gain this year as the 10-year yield climbed and Federal Reserve chair Janet Yellen told Congress more interest-rate hikes would be appropriate if the economy stays on course.
The S&P 500 Index added 1.5 percent to a record 2,351.16. The The Dow Jones Industrial Average jumped 1.8 percent to 20,624.05. The Nasdaq Composite Index ended the week at an all-time high as health-care and phone stocks in the gauge rallied.
While the S&P 500 just capped its fourth straight weekly climb, the index added just 3.5 percent in that stretch, the least for a rally of that duration in two years. It’s now up 9.8 percent since President Donald Trump’s election.
Stephen Auth, the chief investment officer of equities at Federated Investors, said that while the rally is “starting to feel overextended,” the firm’s “fundamental bullish view” is unchanged. “The Trump revolution has changed market psychology,” he wrote in a research note Friday.
Financial companies have been critical to the rally, as investor focus turns to the prospect of tax cuts. The six largest U.S. banks could see annual profit jump by an average of 14 percent if President Trump delivers on corporate taxes, according to data compiled by Bloomberg.
Health-care stocks and technology companies also helped lift the S&P 500 in the week as every sector but energy ended the five days higher. All but nine companies in the 60-member health care index advanced and a 7 percent rally in Cisco systems led tech shares after the company topped estimates for second-quarter revenue and profit.