Stocks posted strong gains and traded in record territory Friday as equities extended gains following Donald Trump's promise for U.S. tax reform.
The S&P 500 rose 0.39%, the Dow Jones Industrial Average increased 0.51%, and the Nasdaq gained 0.37%. All three indexes hit new closing 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. Anadarko Petroleum (APC) - Get Report , Exxon Mobil (XOM) - Get Report and Schlumberger (SLB) - Get Report posted gains of about 1% or more. 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."
Federal Reserve Gov. Daniel Tarullo said he would resign in early April, well before his term was set to expire in 2022. Tarullo's resignation would leave three vacant seats on the Fed board.
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 5.6% to $87.68 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 2.7% 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 17.5% 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 4.7%, 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.
Sketchers (SKX) - Get Report shares soared over 19% after the company missed earnings estimates, mostly due to the impact of foreign currency transactions, however investors saw revenue grow 5.8% to $764.3 million during its fourth quarter.
YELP (YELP) - Get Report shared dropped 12.9% after the company's revenue of $195 million met analysts' expectations, but app user growth fell 4% to 20% during the quarter and its 2017 guidance was reduced.