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Oct 20, 11:42 AM EDT

Banks, technology lead US stocks to gains in morning trading


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AP Photo/Richard Drew

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U.S. stocks notched modest gains in morning trading Friday as investors cheered a crop of strong company earnings. Technology companies posted some of the biggest gains. Banks and bond yields jumped after the Senate passed a budget bill that eases the path toward passing tax cuts sought by the Trump administration. Consumer products companies lagged the most. Crude oil prices rebounded after an early slide.

KEEPING SCORE: The Standard & Poor's 500 index rose 7 points, or 0.3 percent, to 2,569 as of 11:34 a.m. Eastern time. The Dow Jones industrial average gained 97 points, or 0.4 percent, to 23,261. The Nasdaq composite added 23 points, or 0.4 percent, to 6,628. The S&P 500 and Dow hit record highs on Thursday.

TAX CUT NEXT?: The passing of a $4 trillion budget resolution in the Senate stoked hopes on Wall Street that President Donald Trump's tax reform package will be enacted. The measure, which passed narrowly late Thursday and now goes to the House of Representatives, sets the stage for tax legislation later this year that could pass through the Senate without fear of a filibuster by Democrats. It also adds $1.5 trillion to the deficit over the next 10 years. Investors' expectations that such a plan would slash the corporate tax rate, among other business-friendly changes, helped fuel Wall Street's gains this year.

BIG GAINER: Technology sector companies led the market higher. PayPal Holdings climbed 5.4 percent after the payment technology company reported big gains in new users and transactions. The stock rose $3.39, or 5 percent, to $70.64. Alliance Data Systems added $5.99, or 2.6 percent, to $238.79.

BULLISH ON BANKS: Investors bid up shares in banks as bond yields surged. Higher bond yields allow banks to charge higher interest rates on mortgages and other loans. Synchrony Financial gained $1.45, or 4.6 percent, to $33.16. Citizens Financial Group picked up 49 cents, or 1.3 percent, to $37.92. Both also reported higher quarterly earnings than analysts had been expecting.

BEST FOOT FORWARD: Skechers USA soared 36.6 percent after the shoe company reported that its profit and sales were stronger than analysts expected. The stock rose $8.79 to $32.82.

UNPLEASANT SURPRISE: General Electric fell 2.8 percent after slashing its annual earnings forecast and reporting a weak quarter. The stock lost 66 cents to $22.92.

NOT GOOD ENOUGH: Procter & Gamble slid 3.2 percent after the consumer products giant posted solid fiscal first-quarter results, but analysts questioned its sales. Its shares dropped $2.94 to $88.65.

CASHED OUT: NCR slid 9.8 percent after the company cut its annual revenue forecast and said orders for ATMs were weaker than it expected. Its shares lost $3.63 to $33.42.

BONDS YIELDS: Bond prices fell. The yield on the 10-year Treasury note rose to 2.38 percent from 2.32 percent late Thursday.

ENERGY: Oil futures recovered after an early slide. Benchmark U.S. crude was up 22 cents to $51.51 a barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, added 41 cents to $57.64 a barrel in London.

CURRENCIES: The dollar strengthened to 113.49 yen from 112.65 yen on Thursday. The euro fell to $1.1784 from $1.1830.

MARKETS OVERSEAS: In Europe, Germany's DAX fell 0.1 percent, while the CAC 40 in France added 0.1 percent. The FTSE 100 index of leading British shares was flat. In Asia, Japan's benchmark Nikkei 225 finished less than 0.1 percent higher ahead of parliamentary elections on Sunday. Prime Minister Shinzo Abe's party is expected to retain a comfortable lead. Elsewhere, South Korea's Kospi added 0.7 percent, while Hong Kong's Hang Seng index rebounded 1.2 percent after a big sell-off the day before.

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