By Barbara Kollmeyer, MarketWatch
Mead Johnson, Nvidia, Activision among top performers
U.S. stocks traded in record territory Friday, as investors continued to take encouragement from President Donald Trump's pledge to move quickly on changes to the tax code.
Stocks rallied on Thursday, with the all three main indexes closing at records on the same day, after Trump promised to announce a "phenomenal" tax policy in a few weeks. But some analysts worried the rally is becoming fragile.
"The breadth of the market is very narrow, as very few individual stocks are setting their own highs. Historically, a situation when valuations are stretched, breadth is narrow and complacency high, it sets a stage for pullbacks," said Quincy Krosby, market strategist at Prudential Financial.
The S&P 500 index rose 9 points, or 0.4% to 2,316, setting new intraday highs. A jump in oil prices lifted energy shares, which were leading the gainers, up 1.1%. Over the week, the index is set for a 0.8% gain.
The Dow Jones Industrial Average added 100 points, or 0.5% to 20,272, led by gains in Nike, Inc. (NKE) and Caterpillar Inc (CAT), both up more than 1%. The blue-chip index is on track for a 1% weekly gain.
Meanwhile the Nasdaq Composite Index advanced 21 points, or 0.4%, to 5,736. The tech-heavy index is set to end the week 1.2% higher.
Trump's remarks on Thursday appeared to reignite expectations for stock-friendly actions by the administration on the tax front.
"A rally on Wall Street on Thursday, amid the lowest volumes, was very interesting. The minute Trump mentioned 'phenomenal' tax reforms, [computer trading algorithms] kicked in immediately, bidding up prices of banking stocks," Krosby said .
See:This chart could make stock picking great again (http://www.marketwatch.com/story/this-chart-offers-hope-for-long-suffering-stock-pickers-2017-02-10)
All three main stock-market indexes were on track for a third straight weekly advance.
President Trump held a meeting with Japan's prime minister (http://www.marketwatch.com/story/japans-abe-to-unveil-plan-for-massive-investment-in-us-2017-02-06), Shinzo Abe on Friday, briefly sending shares higher.
During the press conference following the meeting Trump said the U.S. wants a "free, fair and reciprocal" trade relationship with Japan. The pair are heading to Trump's Palm Beach, Fla., golf resort this weekend, something the White House described as a "personal gift" to Abe from the president.Read:Why Trump may play nicely with Japan's Abe (http://www.marketwatch.com/story/why-trump-might-play-nice-with-japans-abe-2017-02-09)
Economic data: The cost of imported goods surged by 0.4% in January, rising for the third time in four months, mostly because of rising oil prices that are nudging U.S. inflation higher. U.S. consumer sentiment index fell to 95.7 in February from 98.5.
Stocks to watch: Shares in Mead Johnson Nutrition Co.(MJN) climbed 5.4% after British consumer goods maker Reckitt Benckiser Group PLC(RB.LN) said it would pay $17.9 billion for the baby-food maker (http://www.marketwatch.com/story/reckitt-benckiser-to-buy-mead-johnson-2017-02-10), including debt.
(http://www.marketwatch.com/story/nvidia-falls-despite-record-holiday-quarter-2017-02-09)Activision Blizzard Inc.(ATVI) surged 16% after the "Candy Crush Saga" maker announced a stock buyback and dividend hike (http://www.marketwatch.com/story/activision-blizzard-shares-jump-on-stock-buyback-dividend-hike-2017-02-09) (http://www.marketwatch.com/story/activision-blizzard-shares-jump-on-stock-buyback-dividend-hike-2017-02-09) late Thursday. But the games company's quarterly results disappointed.
Shares of Sears Holdings Corp.(SHLD) soared 30% after the retailer reported fourth-quarter results and announced further details of its restructuring plan.
(http://www.marketwatch.com/story/nvidia-shows-why-it-is-the-hottest-stock-on-wall-street-2017-02-09)Other markets: Asian stocks rose across the board (http://www.marketwatch.com/story/nikkei-soars-other-asian-markets-gain-on-trumps-tax-reform-remarks-2017-02-09), led by a 2.4% rally for the Nikkei 225 index as momentum spilled over from Wall Street. European stocks posted gains (http://www.marketwatch.com/story/european-stocks-set-for-2-week-high-boosted-by-chinese-data-earnings-2017-02-10), with the FTSE 100 leaping to a 4-week high (http://www.marketwatch.com/story/uk-stocks-jump-to-4-week-high-as-miners-rally-2017-02-10), as miners got a boost from upbeat Chinese export data (http://www.marketwatch.com/story/china-exports-beat-forecasts-up-nearly-8-in-jan-2017-02-10).
Oil prices rose 1.4% after the International Energy Agency said Friday (http://www.marketwatch.com/story/opec-output-cuts-at-record-90-compliance-iea-2017-02-10) that OPEC members have reached a record compliance of 90% with their agreed output cuts.
Gold fell 0.1%, to $1,235 an ounce, while the dollar was mostly firmer across the board (http://www.marketwatch.com/story/dollar-gains-further-traction-on-trump-tax-talk-2017-02-10). The yield on the 10-year Treasury note rose to 2.41%.
(END) Dow Jones Newswires
February 10, 2017 15:14 ET (20:14 GMT)
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