Europe shares up, Nasdaq hits record high; U.S. yields up

Fri Jan 13, 2017 5:11pm EST
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By Gertrude Chavez-Dreyfuss

NEW YORK (Reuters) - European stocks advanced on Friday, while the S&P 500 and Nasdaq rose in line with gains in U.S. Treasury yields, as investors were encouraged by upbeat bank earnings and positive U.S. economic data.

Investors largely shrugged off the biggest fall in Chinese exports since 2009 to focus on U.S. data that suggested stronger growth. Market participants largely resumed buying across equity markets based on higher growth expectations that had tailed off this week, with bank shares leading the way.

Top U.S. bank executives, in their first public comments about quarterly earnings, expressed optimism about the outlook for this year as leading financial institutions recorded profits for the fourth quarter.

Bank of America Merrill Lynch (BAC.N: Quote), for instance, reported a 47-percent rise in fourth-quarter profit, while JP Morgan Chase (JPM.N: Quote) also reported strong earnings, with a 24-percent rise in profit.

U.S. economic data have also boosted the market, as retail sales rose in December given strong demand for automobiles and furniture. Producer prices expanded as well.

"Our medium-term view is still positive on the stock market," said Allan von Mehren, chief analyst at Danske Bank in Copenhagen. "Donald Trump is seen as a positive factor for stocks in the longer term as he begins to execute on his plans of reducing taxes and rebuilding U.S. infrastructure."

The Nasdaq Composite .IXIC added 0.48 percent to a record-high close of 5,574.12, bringing its gain so far this year to 3.55 percent.

The Dow Jones Industrial Average .DJI slipped 0.03 percent to 19,885.73, while the S&P 500 .SPX gained 0.18 percent to 2,274.64.   Continued...

Traders work on the floor of the New York Stock Exchange (NYSE) shortly after the opening bell in New York, U.S., January 13, 2017. REUTERS/Lucas Jackson