Dow adds 300 points following earnings beats, surprise retail sales gain

Dow adds 300 points following earnings beats, surprise retail sales gain

U.S. stock indexes rose on Friday as better-than-expected third-quarter earnings reports set the S&P 500 on track for a winning week.

The Dow Jones Industrial Average gained about 310 points, or 0.9%. The S&P 500 added 0.6% and the Nasdaq Composite rose 0.4%.

The Dow and the S&P 500 sat 1.3% and 1.9%, respectively, below their all-time highs.

Earnings momentum continued Friday as Goldman Sachs’ third-quarter results beat significantly on the top and bottom line. The bank stock gained more than 2%.

The stellar report came after earnings beats from other big banks earlier in the week. Financial heavyweights JPMorgan, Bank of America, Morgan Stanley and Citigroup were among the firms topping expectations.

“The banks painted a strong and healthy picture of the US consumer,” noted Edward Moya, senior market analyst at Oanda. “Wall Street can’t turn negative on the economy after seeing reserve releases, moderating trading revenue, mixed loan growth, and a consumer willing to take on debt.”

Retail sales posted a surprise increase in September, rising 0.7%. Economists polled by Dow Jones were expecting a 0.2% decline.

“Despite reports of increasingly widespread shortages, spending on goods apparently held up relatively well,” Capital Economics’ Andrew Hunter said.

The University of Michigan Consumer Sentiment reading will hit the tape at 10 a.m. ET.

Elsewhere, bitcoin crossed the $60,000 level as investors were optimistic about the chance of the U.S. Securities and Exchange Commission approving the first bitcoin futures exchange-traded fund.

The cryptocurrency’s jump added to positive market sentiment, suggesting risk-taking could pick up. Tesla and Coinbase shares rose.

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The S&P 500 on Thursday posted its best daily performance since March 5, while the Dow had its best day since July and the Nasdaq Composite notched its best day since May.

All three averages are on track to end the week higher.

So far, 80.5% of the 41 S&P 500 companies that have reported third quarter results have topped earnings-per-share expectations, according to FactSet.

Taking into account these results and estimates for those yet to report, third-quarter profit growth increased 29.8%, FactSet analysis shows.

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