Stocks Poised for Records, Despite Weakness in Bank Shares

By Riva Gold and Lucy Craymer Features Dow Jones Newswires

World stocks on track for fresh record

Continue Reading Below

-- Pound continues to strengthen

-- Nikkei above 21000

Stocks climbed toward fresh records Friday, even as shares of big banks struggled.

Recent economic data releases have helped lift stocks, as they signal a synchronized pickup in global growth, encouraging equity investors.

The Dow Jones Industrial Average rose 50 points, or 0.2%, to 22891 in recent trading, on track to finish the week up 0.5% and notch a fresh record. The S&P 500 added 0.2%, and the Nasdaq Composite gained 0.4%.

Continue Reading Below

Despite the broader gains, U.S. bank stocks were set to decline for the third day in row. Major lenders started reporting their third-quarter earnings this week, and while they have mostly beat expectations, their stocks dropped after the results.

Wells Fargo slid 3.1% as the bank reported weaker-than-expected third-quarter revenue, while shares of Bank of America added 0.7% after the bank reported its quarterly profit had risen 13% from a year earlier. On Thursday, shares of J.P. Morgan Chase and Citigroup also fell after their respective earnings results. Financial stocks in the S&P 500 were on track to end the week down 0.8%, one of the worst performing sectors in the broader index.

The KBW Nasdaq Bank Index fell 0.2% Friday, on track for a 1.6% weekly drop following three straight sessions of declines.

Also weighing on banks was a drop in U.S. government bond yields. The decline came after U.S. core inflation rose by less than expected, according to data from the Labor Department. Yields on 10-year Treasury notes edged down to 2.296% from 2.323%.

Following the report the U.S. dollar fell, too, with the WSJ Dollar Index, which measures the U.S. currency against 16 others, fell 0.3%.

Stocks around the world flirted with records Friday, as money flowed into global stock funds. Flows into global equity funds during the week ending Oct. 11 hit a record, according to fund tracker EPFR Global.

The MSCI World equity benchmark of large and mid-cap stocks was set to hit another all-time high amid gains in Asian and European stocks. The Stoxx Europe 600 edged up 0.3%, following gains in Japan and Australia.

Germany's DAX index was flat near all-time highs. London's export-heavy FTSE 100 fell 0.2% from a record close, bucking the global trend of gains, as the pound continued its ascent against the dollar.

In Asian trading Friday, stocks closed mostly up. Korea's Kospi, however, struggled to log a third-straight record close, edging down less than 0.1%.

Traders came back from the midday break in Japan in an upbeat mood, with the Nikkei climbing more after sprinting to heights last seen in 1996. The benchmark finished up 1%.

New Zealand's stock benchmark logged a record-extending ninth-straight gain to new highs and Australian shares rose 0.3%.

Marina Force contributed to this article.

Write to Riva Gold at riva.gold@wsj.com and Lucy Craymer at Lucy.Craymer@wsj.com

(END) Dow Jones Newswires

October 13, 2017 11:11 ET (15:11 GMT)