By Yasin Ebrahim
Investing.com – The Dow and S&P 500 hit record highs on Friday as financials lost some gains despite better-than-expected gains from Wall Street banks.
That rose by 0.30% or 102 points and reached a record of 34,256.75. It rose 0.90% to a record high of 4,186.10 and fell 0.1%.
Morgan Stanley (NYSE :), Bank of New York Mellon (NYSE 🙂 and PNC Financial Services (NYSE 🙂 reported results for the first quarter that beat estimates in the income statement, but the latter made the praise come for more rose as 2%.
Other regional banks were also higher, with US Bancorp (NYSE 🙂 leading the indictment, rising 3% as better-than-expected quarterly results released Thursday sparked optimism on Wall Street.
US Bancorp has begun "seeing a rebound in its fee-paying businesses along with the improved credit picture, which should reassure investors that the company will weather this downturn better than almost any of its peers and maintain its group premium rating". RBC said.
Financials came under pressure on falling yields last session, and analysts warned that any further deterioration in interest rates would likely continue to weigh on cyclicals.
"The bottom line is: If the TNX (10-year treasury yields) continues to decline in the short term, these themes / strategies (small caps, value and financials) will continue to underperform (short-term)," said Janney.
Materials were boosted by a 10% increase in PPG Industries (NYSE 🙂 following better-than-expected first quarter results and bullish second quarter forecasts released Thursday.
Sentiment on cyclicals was also bolstered by further signs of bullish consumer spending following Thursday's retail sales data blown out.
The University of Michigan announced on Friday that its preliminary index rose from 84.9 in March to 86.5 in the first half of this month, its highest level in a year.
Meanwhile, energy fell as oil prices forfeited gains despite optimism about the global recovery after China posted record GDP growth in the first quarter.
Marathon oil (NYSE :), EOG Resources (NYSE :), and Nov (NYSE 🙂 were some of the biggest declines.
Big Tech, meanwhile, consolidated its profits in mixed fab trading as US bond yields slid from session highs
Google parent alphabet (NASDAQ :), Facebook (NASDAQ :), and Apple (NASDAQ 🙂 were lower, while Amazon.com (NASDAQ 🙂 and Microsoft (NASDAQ 🙂 were above the flatline.
In other news, Splunk (NASDAQ 🙂 fell more than 7% after KeyBanc downgraded the stock from overweight to sector weight following the resignation of Chief Technology Officer Tim Tully.
The resignation comes at a "difficult time" for the company as it moves to a subscription model this year, KeyBanc said.