The Dow Jones Industrial Average surged 268.96 points. Gains in the financials and materials sectors pushed the S&P 500 0.66% higher. The benchmark broke above the key 2,900 level for the first time in six months and stood just 1% from a record high. The Nasdaq Composite advanced 0.46%.
J.P. Morgan Chase kicked off the corporate earnings season on Friday by reporting better-than-expected results. The company said “impact of higher rates ” boosted its results, along with its fixed-income trading revenues. Wall Street cheered J.P. Morgan’s report, sending the stock up 4.7%.
“A solid 1Q19 beat should be good news for the shares of both JPM and its universal bank peers,” said Jeffery Harte, an analyst at Sandler O’Neill & Partners, in a note. We “specifically see a positive read through for universal bank peers from JPM’s FICC and debt underwriting revenue beats.”
Wells Fargo also reported better-than-expected results on the back of its consumer lending business, but the stock erased earlier gains as the bank’s CFO issued a tepid outlook for net interest income.
Investors came into the season expecting it to be a tough one for companies. FactSet expected first-quarter earnings to have fallen 4.2% in the first quarter.
Sentiment was also boosted on Friday by a massive deal in the energy sector. Dow member Chevron announced plans to acquire Anadarko Petroleum for $33 billion in cash and stock. The deal values Anadarko at a 37% premium from the stock’s close on Thursday. Anadarko shares jumped more than 31% while Chevron fell nearly 5%.
“The fact that you have this appetite for a takeover keeps showing there’s strength in the market,” said Michael Katz, managing partner at Seven Points Capital. “With oil going above $70 it shows there is an interest in these companies and I don’t think that’s going to stop.”
“A mega-takeover this big just doesn’t end like that. I think there’s going to be more consolidation in the industry. That’s helped the market,” Katz said.
Stronger-than-expected exports data out China also lifted stocks. Exports in China rose 14.2 percent in dollar terms last month, nearly double what economists expected.
Investors have recently worried over a possible economic slowdown around the globe, particularly in China.
“We’ve got a twin wind here,” said Jeff Kravetz, regional investment director at U.S. Bank Wealth Management. “We’ve got better-than-expect Chinese trade data and we’ve got a strong kick-off to earnings season. That’s pushing markets higher and instilling confidence with investors.”
Friday’s gains put the S&P 500 on pace for its third consecutive weekly gain. On top of Friday’s deluge of corporate news, investors digested the release of the Federal Reserve’s minutes from its March meeting as well as further progress on U.S.-China trade talks.
—CNBC’s Sam Meredith contributed to this report.