S&P 500 posts 3rd weekly gain

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April 12, 2019 5:19pm NYSE:SPY

From Fred Imbert:

  • The S&P 500 broke above the key 2,900 level and stood at less than 1% from a record high.
  • J.P. Morgan Chase kicked off the corporate earnings season on Friday by reporting better-than-expected results. Wall Street cheered J.P. Morgan’s report, sending the stock up.

Stocks rose on Friday after a slew of positive corporate news that included strong bank earnings and Disney unveiling a new streaming service.

The Dow Jones Industrial Average surged 269.25 points. Gains in the financials and materials sectors pushed the S&P 500 0.66% higher. The benchmark broke above the key 2,900 level for the first time in six months and stood at less than 1% from a record high. It’s also the third consecutive weekly gain for the S&P 500. The Nasdaq Composite advanced 0.46%.

J.P. Morgan Chase kicked off the corporate earnings season on Friday by reporting better-than-expected results. The company said “impact of higher rates ” boosted its results, along with its fixed-income trading revenues. Wall Street cheered J.P. Morgan’s report, sending the stock up 4.7%.

“A solid 1Q19 beat should be good news for the shares of both JPM and its universal bank peers,” said Jeffery Harte, an analyst at Sandler O’Neill & Partners, in a note. We “specifically see a positive read through for universal bank peers from JPM’s FICC and debt underwriting revenue beats.”

Wells Fargo also reported better-than-expected results on the back of its consumer lending business, but the stock erased earlier gains as the bank’s CFO issued a tepid outlook for net interest income.

Investors came into the season expecting it to be a tough one for companies. FactSet expected first-quarter earnings to have fallen 4.2% in the first quarter.

Disney shares added to the gains, rising more than 11% after the media giant unveiled a streaming service at a lower price point than Netflix. Shares of Netflix, meanwhile, dipped 4.5%.

Sentiment was also boosted on Friday by a massive deal in the energy sector. Dow member Chevron announced plans to acquire Anadarko Petroleum for $33 billion in cash and stock. The deal values Anadarko at a 37% premiumfrom the stock’s close on Thursday. Anadarko shares jumped 32% while Chevron fell nearly 5%.

“The fact that you have this appetite for a takeover keeps showing there’s strength in the market,” said Michael Katz, managing partner at Seven Points Capital. “With oil going above $70 it shows there is an interest in these companies and I don’t think that’s going to stop.”

“A mega-takeover this big just doesn’t end like that. I think there’s going to be more consolidation in the industry. That’s helped the market,” Katz said.

Stronger-than-expected exports data out China also lifted stocks. Exports in China rose 14.2 percent in dollar terms last month, nearly double what economists expected.

Investors have recently worried over a possible economic slowdown around the globe, particularly in China.

“We’ve got a twin wind here,” said Jeff Kravetz, regional investment director at U.S. Bank Wealth Management. “We’ve got better-than-expect Chinese trade data and we’ve got a strong kick-off to earnings season. That’s pushing markets higher and instilling confidence with investors.”

On top of Friday’s deluge of corporate news, investors digested the release of the Federal Reserve’s minutes from its March meeting as well as further progress on U.S.-China trade talks.

–CNBC’s Yun Li and Sam Meredith contributed to this report.

The SPDR S&P 500 ETF Trust (SPY) fell $0.06 (-0.02%) in after-hours trading Friday. Year-to-date, SPY has gained 9.17%.

SPY currently has an ETF Daily News SMART Grade of A (Strong Buy), and is ranked #1 of 154 ETFs in the Large Cap Blend ETFs category.

This article is brought to you courtesy of CNBC.

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