* BofA, Wells Fargo, JPMorgan post profit above estimates
* Consumer stocks drop as Dec. retail sales fall short
* Facebook jumps on upgrade, pushes Nasdaq to record
* Indexes end: Dow -0.03 pct, S&P +0.18 pct, Nasdaq +0.48
(Updates to close)
By Noel Randewich
Jan 13 An increase in Facebook pushed the Nasdaq
to a record high on Friday, and the S&P 500 also rose after
major U.S. banks kicked off the fourth-quarter earnings season
with strong results.
Wall Street has surged since President-elect Trump's
unexpected election victory on optimism he will cut corporate
taxes, spend on infrastructure and deregulate banks.
With stocks trading at price-to-earnings valuations well
above historical averages, many investors believe further gains
will depend on S&P 500 companies handing in strong report cards
over the next several weeks.
Major banks on Friday did not disappoint: Bank of America
, JPMorgan and Wells Fargo all posted
quarterly profits above analysts' expectations. They also
expressed optimism about 2017 in their first public comments
about earnings since Trump won the election in November.
Their shares surged over 2 percent but later gave up most of
those gains. Wells Fargo ended 1.36-percent higher and JPMorgan
added 0.53 percent.
The S&P financial sector has jumped about 17 percent since
the election, far outpacing the S&P 500's 6-percent rise.
"Earnings are key going forward, and we're off to a decent
start," said Mike Baele, managing director with the Private
Client Reserve of U.S. Bank in Portland, Oregon.
The Dow dipped marginally, with Wal-Mart Stores and
other consumer stocks down after a report showed U.S. retail
sales and core retail sales increased less than expected in
Trading volumes were light, with financial markets closed on
Monday for Martin Luther King Jr. Day.
The Nasdaq Composite added 0.48 percent to a
record-high close of 5,574.12 points, bringing its gain so far
this year to 3.55 percent.
The Dow Jones Industrial Average slipped 0.03 percent
to 19,885.73 points, while the S&P 500 gained 0.18
percent to 2,274.64.
For the week, the Dow fell 0.4 percent, the S&P 500 shed 0.1
percent and the Nasdaq gained 1 percent.
The biggest boost to the S&P 500 and the Nasdaq on Friday
was provided by Facebook, which jumped 1.36 percent after
Raymond James upgraded the stock.
The combined profit of S&P 500 companies is expected to
have risen 6.2 percent in the fourth quarter, according to
Thomson Reuters I/B/E/S.
The S&P 500 is trading at 17 times expected earnings,
compared to its 10-year average of 14 times expected earnings,
according to Thomson Reuters Datastream.
"We've come a long way very quickly so there's scope for a
pullback, but overall the outlook for 2017 is relatively
positive," said Jon Adams, senior investment strategist at BMO
Global Asset Management.
Advancing issues outnumbered declining ones on the NYSE by a
1.69-to-1 ratio; on Nasdaq, a 2.34-to-1 ratio favored advancers.
The S&P 500 posted 31 new 52-week highs and 3 new lows; the
Nasdaq Composite recorded 126 new highs and 14 new lows.
About 5.8 billion shares changed hands on U.S. exchanges,
lower than the 6.4 billion average in the last 20 sessions.
(Additional reporting by Tanya Agrawal; Editing by Nick