Stocks, Dollar Jump After Senate Passes Budget Proposal

By Corrie Driebusch and Riva Gold Features Dow Jones Newswires

Dollar, yields climb as budget plan passes Senate

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-- Global stocks rise

-- Nikkei on longest win streak in nearly 57 years

Stocks extended their remarkable streak of gains Friday.

The Dow Jones Industrial Average closed above 23000 for the first time Wednesday, and its fresh high Friday marked the most records in a calendar year for the index since 1995.

Earlier this month, the Dow's advance that started in March 2009 became the third-longest bull market in the index's history.

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The relentless rise in stocks is ongoing because "alternatives are not good enough yet," said Chris Wolfe, chief investment officer at First Republic Private Wealth Management, referring to how interest rates are near historic lows.

The bulk of the recent leg up in the rally is founded on earnings gains and global growth, traders and investors said.

"Earnings growth looks good, and there's not a lot of downward guidance, that's key," said Mr. Wolfe.

The Dow Jones Industrial Average rose 165.59 points, or 0.7%, to 23328.63 on Friday, notching its 53rd record close of 2017. The index's weekly gain of 2% was its biggest since mid-September.

The S&P 500 gained 13.11 points, or 0.5%, to 2575.21 on Friday, while the Nasdaq Composite added 23.99 points, or 0.4%, to 6629.05. Both indexes closed at records Friday and notched weekly gains.

Corporate earnings have largely driven stocks in the past week.

PayPal Holdings rose $3.72, or 5.5%, to $70.97 Friday after the online-payments company reported stronger-than-expected earnings.

Shares of Procter & Gamble fell 3.34, or 3.6%, to 88.25 after the maker of household goods reported sluggish sales growth.

"We're still in very early stages of the earnings season, but it's been going very well," said Lindsey Bell, investment strategist at CFRA Research.

Of the S&P 500 companies that have reported earnings so far, three-quarters have topped estimates, according to FactSet.

Earnings season picks up this coming week, as nearly 200 companies in the S&P 500 are scheduled to report third-quarter results, according to FactSet.

Stocks, the dollar and Treasury yields received a boost Friday after the U.S. Senate on Thursday passed a budget blueprint seen as a key hurdle in revamping the tax code.

The passage helps unlock a procedure that Republicans plan to use to rewrite the tax code with just GOP votes, which investors largely see as positive for earnings and economic growth.

U.S. government bonds weakened, sending the 10-year Treasury yield up to 2.381% -- the highest close since July -- from 2.323% Thursday. Yields rise as prices fall.

The WSJ Dollar Index, which tracks the dollar against a basket of 16 major currencies, was recently up 0.6%.

"The first hurdle being passed now is positive for tax reform, but there are quite a lot of questions to answer," said Edward Park, investment director at Brooks Macdonald. Many investors are still unsure when it will be delivered and whether it can be delivered at all, he said.

The Stoxx Europe 600 added 0.3% following its biggest daily decline since August, echoing widespread gains across Asian markets. For the week, the Stoxx Europe 600 fell 0.3%.

Japan's Nikkei Stock Average rose less than 0.1% Friday and notched its 14th straight day of gains. The Nikkei's winning streak was its longest in nearly 57 years and the index ended Friday at its highest since 1996.

However, Japanese equity funds had record outflows in the week ending Oct. 18 following a series of multiyear highs for the Nikkei, according to fund-tracker EPFR Global.

South Korea's Kospi rose 0.7% to another record closing high amid gains in index heavyweight Samsung Electronics.

Money also fled Korean equity funds at the fastest clip since 2016 this week, according to EPFR.

Write to Corrie Driebusch at corrie.driebusch@wsj.com and Riva Gold at riva.gold@wsj.com

(END) Dow Jones Newswires

October 20, 2017 16:59 ET (20:59 GMT)