By Sinead Carew
(Reuters) - Wall Street continued its rally on Friday with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales drove investor optimism about economic growth.
"The fact all the big money centre banks beat on the bottom line is a good omen for the rest of the earnings season," said William Lynch, director of investments at Hinsdale Associates, in Hinsdale, Illinois.
Investors were also hopeful 2018 financial forecasts from U.S. companies would beat Wall Street estimates as many analysts may not have tax savings fully reflected in their models as the tax bill was signed into law so late in December.
"I don't know how much of that is priced in right now," said Stephen Massocca, senior vice president at Wedbush Securities in San Francisco. "It seems like the economy is going OK, inflation is kind of nonexistent right now, wage growth is not an issue for most income statements, so what's not to like here."
Earnings for S&P 500 companies are expected to increase on an average by 12.1 percent in the quarter, with profit for financial services companies likely to increase 13.2 percent, according to Thomson Reuters I/B/E/S.
While Wells Fargo
The Dow Jones Industrial Average <.DJI> rose 228.46 points, or 0.89 percent, to 25,803.19, the S&P 500 <.SPX> gained 18.68 points, or 0.67 percent, to 2,786.24 and the Nasdaq Composite <.IXIC> added 49.29 points, or 0.68 percent, to 7,261.06.
Advancing issues outnumbered declining ones on the NYSE by a 1.17-to-1 ratio; on Nasdaq, a 1.54-to-1 ratio favoured advancers.
Volume so far on U.S. exchanges was 6.88 billion shares, above the 6.39 billion average for the full session over the last 20 trading days.
(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)