UPDATE: Stock market ends, day week with a gain; Nasdaq logs 57th all-time high
By Mark DeCambre and Carla Mozee, MarketWatch
Bank of America logs profit rise; Wells Fargo disappoints on mortgage-related charges
U.S. equity benchmarks finished the session and the week slightly higher on Friday, and the Nasdaq recorded an all-time high, as President Donald Trump delivered a speech decertifying a nuclear agreement with Iran.
Read:The S&P 500 is poised to make stock-market history--for doing almost nothing (http://www.marketwatch.com/story/sp-500-is-poised-to-make-uncanny-stock-market-historyfor-doing-almost-nothing-2017-10-12)
What did the main benchmarks do?
The Dow Jones Industrial Average rose 30.71 points, or 0.1%, to end at 22,871.72, after notching an intraday all-time high at 22,905.33, aided by gains in American Express Co. (AXP) and McDonald's Corp. (MCD).
The S&P 500 index advanced 2.24 points, or 0.1%, to close at 2,553.17, after hitting an intraday record at 2,557.65. The broad-market index saw its sharpest sector gains in technology and materials, both up 0.5%.
Meanwhile, the Nasdaq Composite Index climbed 14.29 points, or 0.2%, to 6,605.80. The technology-laden index booked its 57th record close in 2017.
For the week, gains were modest. The Dow industrials recorded a weekly rise of 0.4%, while the S&P 500 saw an 0.2% increase. Both have risen for five straight weeks. The Nasdaq logged a 0.2% weekly advance, marking its third consecutively weekly win.
In the year to date, the Dow has gained nearly 15.7%, the S&P 500 is 14%, and the Nasdaq Composite has advanced about 23%.
See: Howard Gold on 5 things to do when every investment is too expensive (http://www.marketwatch.com/story/five-things-to-do-when-every-investment-is-too-expensive-2017-10-12)
What drove markets?
Upbeat earnings reports from banks and the highest consumer-sentiment reading in 13 years supported modest buying.
Against that backdrop, the Trump administration said it won't certify Iran's compliance with a 2015 nuclear agreement, declaring Tehran a regime that continues to sponsor terrorism and alleging that Iran "intimidated international expectations" sent to inspect it from building up nuclear armaments.
Trump laid out a new strategy to deal with Iran and warned that he could cancel U.S. participation in the nuclear pact at any time. The strategy includes placing additional sanctions on the Iran regime to block its "financing of terror," said Trump.
The president also ended billions of dollars in subsidies to insurers (http://www.marketwatch.com/story/trump-to-halt-obamacare-subsidies-to-health-insurers-2017-10-13) under the Affordable Care Act program. The White House said the government can't lawfully make the payments as there is no appropriation for them.
What did the data show?
The consumer-price index rose 0.5% in September, the second increase in a row (http://www.marketwatch.com/story/us-inflation-surges-again-after-hurricane-boosts-gas-prices-cpi-shows-2017-10-13)and the largest in eight months. However, economists polled by MarketWatch had forecast a 0.6%. Stripping out volatile food and energy costs, core CPI rose at a much smaller 0.1% rate.
A reading on retail sales (http://www.marketwatch.com/story/us-retail-sales-post-biggest-gain-biggest-since-2015-2017-10-13) showed a rise of 1.6% in September, reflecting the largest increase in 2 1/2 years, coming in line with Wall Street expectations.
The University of Michigan's preliminary reading of the consumer-sentiment index for October came in at 101.1, marking its highest level since 2004 (http://www.marketwatch.com/story/consumer-sentiment-surges-to-13-year-high-in-october-2017-10-13).
Read:How to invest in health-care stocks regardless of what happens in Washington, D.C (http://www.marketwatch.com/story/how-to-invest-in-health-care-stocks-regardless-of-what-happens-in-washington-dc-2017-10-13).
Check out:MarketWatch's Economic Calendar (http://www.marketwatch.com/economy-politics/calendars/economic)
What did strategists say?
"There's no reason to sell. Just sit and watch your stuff go up and that's why trading volumes are low," said Randy Frederick, managing director at Schwab Center for Financial Research, referring to measures of volatility, notably the CBOE Volatility Index , hanging around historic lows, below 10, as stocks test records.
Jack Ablin, chief investment officer at BMO Private Bank, said the weaker than expected inflation report reinforced the view that the Fed will take a more tempered approach to tightening monetary policy, even if the central bank appears committed to hiking rates in December.
"The weaker than expected inflation results set the stage for some risk taking," he said. "As long as we have reasonable economic growth with low inflation than the path of least resistance is higher," he continued.
Which Fed speakers were in focus?
Outgoing Fed Vice chairman Stanley Fischer said (http://www.marketwatch.com/story/feds-fischer-says-trump-should-give-yellen-a-second-term-2017-10-13) Fed Chairwoman Janet Yellen should serve a second four-year term. "Janet is a safe pair of hands and very good at explaining what she is doing and persuading people of what she's doing and I think that is critically important," he said.
Fed Chairwoman Janet Yellen will speak on Sunday.
Which stocks were in focus?
Bank of America Corp.(BAC) shares slipped 1.5% after the lender posted a rise in third-quarter profit (http://www.marketwatch.com/story/bank-of-america-profit-climbs-but-trading-slumps-2017-10-13).
Wells Fargo & Co.(WFC) shares declined 2.8%, after it reported third-quarter earnings that were weaker than expected (http://www.marketwatch.com/story/wells-fargo-stock-slides-after-tepid-growth-legal-costs-weigh-on-earnings-2017-10-13), with a profit of $4.6 billion, or 84 cents a share, including a charge of $1 billion to settle a mortgage-linked probe, compared with profit of $5.6 billion at the same period last year.
Check out:Bank stocks are soaring, but now it's time to go for quality (http://www.marketwatch.com/story/bank-stocks-are-soaring-but-now-its-time-to-go-for-quality-2017-10-10)
And see:Third-quarter earnings seen as 'an easy beat,' may bring more market records (http://www.marketwatch.com/story/third-quarter-earnings-seen-as-an-easy-beat-could-set-up-more-stock-market-records-2017-10-09)
Shares of Applied Optoelectronics Inc.(AAOI) fell about 20%. The fiber-optic networking company warned investors (http://www.marketwatch.com/story/applied-optoelectronics-down-more-than-17-on-profit-revenue-warning-2017-10-12) about lower-than-expected third-quarter profit and revenue late Thursday.
Antares Pharma Inc.(ATRS) shares sank 38%, after the company's announcement Thursday that the U.S. Food and Drug Administration had found deficiencies in the drug Xyosted (testosterone enanthate) during its review process.
Monsanto Co.(MON) shares moved 2% higher after Bayer AG said it has reached a $7 billion deal to sell parts of its crop-science business (http://www.marketwatch.com/story/bayer-agrees-7-billion-sale-of-assets-to-basf-in-aid-of-monsanto-megadeal-2017-10-13) to rival BASF SE.
What are other assets doing?
Bitcoin climbed as high as $5,856 earlier Friday, according to CoinDesk data. The cryptocurrency began setting new records (http://www.marketwatch.com/story/bitcoin-soars-to-a-new-all-time-high-above-5100-2017-10-12) after jumping on Thursday.
Check out:5 reasons bitcoin has roared to its highest level ever, defying Dimon's 'fraud' call (http://www.marketwatch.com/story/5-reasons-bitcoin-has-roared-to-its-highest-level-ever-defying-dimons-fraud-call-2017-10-12)
European stocks (http://www.marketwatch.com/story/dax-on-track-for-another-record-as-bayer-rises-on-deal-news-2017-10-13) ended mostly higher, with Germany's DAX marking an all-time high, while most Asian markets closed with gains, with Japan's Nikkei benchmark rising 1%.
Gold futures (http://www.marketwatch.com/story/gold-churns-below-key-1300-line-ahead-of-consumer-inflation-snapshot-2017-10-13) rose to settle above $1,300 an ounce, after trading flat earlier in the day (http://www.marketwatch.com/story/gold-rises-tries-to-regain-grip-on-1300-level-2017-10-12), while oil futures (http://www.marketwatch.com/story/oil-prices-surge-on-strong-chinese-crude-imports-and-iran-uncertainty-2017-10-13) settled at a two-week high above $51 a barrel.
The ICE U.S. Dollar Index (http://www.marketwatch.com/story/dollar-in-holding-pattern-with-inflation-data-to-highlight-feds-aim-to-hike-rates-2017-10-13) was little changed, after slipping 0.1% on Thursday. The gauge marked its first weekly fall in five weeks.
-Mark DeCambre; 415-439-6400; AskNewswires@dowjones.com
(END) Dow Jones Newswires
10-13-17 1721ETCopyright (c) 2017 Dow Jones & Company, Inc.