Stocks traded at session highs Friday as equities extended gains following Donald Trump's promise for U.S. tax reform in the next few weeks.
The S&P 500 rose 0.27%, the Dow Jones Industrial Average increased 0.39%, and the Nasdaq gained 0.24%. All three indexes hit new records on Thursday after the president promised he would soon cut taxes for businesses.
All S&P 500 sectors were in the green. The energy and materials sectors led markets higher as Anadarko Petroleum(APC) - Get Report , Exxon Mobil(XOM) - Get Report and Schlumberger(SLB) - Get Report posted gains. Nike(NKE) - Get Report and Caterpillar (CAT) - Get Report were the leading gainers on the Dow.
The president on Thursday, in a meeting with airline and airport executives, said that lowering the "overall tax burden on American business is big league. That's coming along very well. He added, "We're way ahead of schedule, I believe. And we're going to announce something I would say over the next two or three weeks that will be phenomenal in terms of tax."
Sam Stovall, CFRA's chief investment strategist, said that Trump's positive comments about cutting taxes were giving markets additional reason to be optimistic.
"We are benefiting right now from the Trump hype, but my worry is that we are also starting to hear some sniping," Stovall said in a phone interview. "So the progression will go from hype to snipe to gripe, where we are excited about what he said he's going to do, and now we have people questioning whether that's going to happen."
White House press secretary, Sean Spicer, said Thursday the Trump administration plans to work with Congress to roll out a comprehensive tax plan "that will address both the business side of the tax ledger as well as the individual rates" and said the plan will be "something that we haven't seen since 1986."
Also positive for investors was Trump saying he would uphold the "One China" policy in a phone call with Xi Jinping, China's president. Meanwhile, Trump plans to meet with Japanese Prime Minister Shinzo Abe at the White House on Friday in a meeting that likely will focus on trade. Abe will spend the weekend at Trump's Mar-A-Lago resort in Palm Beach, Fla.
Crude oil prices jumped after the International Energy Agency reported Friday that OPEC members and the 11 non-OPEC countries -- which agreed to cut oil production by 1.2 million barrels a day in November -- largely have complied with the production cuts. The IEA reported "record initial compliance" of 90% from these countries, noting Saudi Arabia reduced production more than required.
"This first cut is certainly one of the deepest in the history of OPEC output cut initiatives," the IEA said, adding, "The oil market is very much in a wait-and-see mode."
The preliminary University of Michigan Consumer Sentiment Index for February fell to 95.7 from 98.5 in January and came in lower than economists expected.
U.S. import prices in January rose 0.4%, more than economists had expected. Export prices rose 0.1%.
Mead Johnson (MJN) shares rose 4.9% to $87.20 after Reckitt Benckiser (RBGLY) reached a deal to purchase the U.S. baby formula company for $90 a share in cash, or a total of $17.9 billion, including net debt.
"The acquisition of Mead Johnson is a significant step forward in RB's journey as a leader in consumer health," said Rakesh Kapoor, Reckitt Benckiser's CEO. "With the Enfa family of brands, the world's leading franchise in infant and children's nutrition, we will provide families with vital nutritional support."
Nvidia (NVDA) - Get Report fell 2% after the visual computing company reported a 55% jump in quarterly revenue to $2.17 billion and showed double-digit growth in most of its business segments. Nvidia posted earnings of 99 cents a share, a 183% increase from the previous year, and surpassed Wall Street's estimates.
Activision Blizzard(ATVI) - Get Report shares popped 16.7% after the video game and personal computer developer reported revenue of $2.01 billion, up 49%. The company, which brought the Candy Crush Saga games last year, said profit of $254 million rose 60% from the prior year, while earnings of 33 cents a share jumped 57%.
Twitter(TWTR) - Get Report shares continued to slump Friday, down 4.6%, after the social media company reported fourth-quarter revenue below forecasts and after the stock was downgraded to sell at UBS. Twitter sank 12.3% on Thursday.