Wall Street continued its rally on Friday with record closing highs as the fourth-quarter earnings season kicked off with solid results from banks and robust retail sales drove investor optimism about economic growth. Stocks fell after the yield on the 10-year Treasury reached its highest level since March, but they ended up recovering most of their losses as the day progressed and rates pulled back.
The S&P 500 rose 19.33 points, or 0.7%, to a record 2,767.56. The loss snapped the index's longest winning streak to start a year since 2010. "I think this is going to be a better year for traders because you're going to get some volatility".
Although a quick jump in rates could easily jolt markets out of their calm ride, experts say markets are prepared for rates to rise gradually. But stocks absorbed the gains without a hiccup, unlike earlier in the week when rate worries helped send the Standard & Poor's 500 lower for its lone blemish this year. Low rates also make bonds less attractive, which pushes investors into stocks.
Treasury yields, meanwhile, rose after a key measure of inflation rose more last month than economists expected.
The Dow is up 507.32 points, or 2 percent. It traded at 2.02 percent at 9:17 a.m. ET.
The biggest USA lender by assets said the new tax law would help future profits by not only reducing the amount it pays the federal government but also by stimulating more business.
JAPAN: Bank of Japan unexpectedly cut its purchases of long-dated Japanese government bonds, sending the Japanese yen higher.
Faf Du Plessis: We've asked for a wicket with pace and bounce
Why Is Rahane sitting out? The results can be rewarding, but for that, the men that matter, must continue to go with their gut. In both innings, he was squared up with short deliveries and ended up offering simple looped-up catches.
High-dividend stocks like real estate companies, utilities and makers of consumer products fell.
The latest data from Thomson Reuters showed that the S&P 500 companies' blended earnings in the fourth quarter of 2017 are expected to rise 11.8 percent year on year, while the revenues are forecast to increase 6.9 percent.
France's CAC 40 gained 0.5 percent, the FTSE 100 in London rose 0.2 percent and Germany's DAX climbed 0.3 percent. The Nasdaq composite fell 10 points, or 0.1 percent, to 7,153. It credited stronger demand and fares.
Facebook dropped $8.40, or 4.5 percent, to $179.37.
Campbell Soup fell 3.1 percent. The euro rose to $1.1957 from $1.1933, and the British pound fell to $1.3519 from $1.3534. Brent crude, the worldwide standard, gained 10 cents to $67.88 per barrel.
OIL: Benchmark U.S. crude lost 3 cents to $63.54 per barrel on the New York Mercantile Exchange. Brent crude, the global standard, rose 6 cents to $69.26 a barrel.
The Russell 2000 index of smaller-company stocks gained 5.18, or 0.3 percent, to 1,591.97.