Solid bank earnings push stocks mostly higher

Banks led U.S. stock indexes mostly higher Friday, propelling the Nasdaq composite index to its fourth record high this week.

Investors welcomed quarterly earnings from JPMorgan Chase, Bank of America and Wells Fargo, all of which reported results that exceeded Wall Street’s expectations. Financial stocks also benefited from an upward move in bond yields, which drives higher interest rates on loans.

Real estate stocks were the biggest laggard. Shares in energy companies also closed lower as crude oil prices declined. Mixed data on U.S. retail sales weighed on department store stocks.

Friday’s crop of company earnings kicks off several weeks of corporate earnings reports, which will give investors new insight into the health of corporate America and the economy.

“We all thought financials would do well,” said J.J. Kinahan, TD Ameritrade’s chief strategist. “Now how about the other areas of the economy?”

The Dow Jones industrial average slipped 5.27 points, or 0.03%, to 19,885.73. The average had been up 61 points earlier in the day. The Standard & Poor’s 500 index rose 4.20 points, or 0.2%, to 2,274.64. The Nasdaq advanced 26.63 points, or 0.5%, to 5,574.12. The index has set a record-high close six times this year.

Small-company stocks rose more than the rest of the market. The Russell 2000 index jumped 10.98 points, or 0.8%, to 1,372.05.

The major stock indexes headed higher early on in the day as investors reacted to earnings reports from JPMorgan Chase, Bank of America and Wells Fargo. The three banking giants delivered quarterly results that exceeded Wall Street’s expectations, pushing their shares higher. JPMorgan rose 0.5% to $86.70. Bank of America rose 0.4% to $23.01. Wells Fargo climbed 1.5% to $55.31.

Read more: Wells Fargo quarterly earnings fall in wake of bogus-accounts scandal »

Traders also reviewed the latest monthly snapshot of U.S. retail sales, which showed that sales rose 0.6% overall in December, mainly because of a pickup in online shopping and sales of autos and gasoline.

“If you back out gasoline increasing and auto sales increasing, it’s not an impressive number,” Kinahan said.

Read more: More pay, greater confidence lift U.S. retail sales — but brick-and-mortar chains lag »

The retail sales report weighed down shares of several department store chains and clothing brands. By early afternoon, the market had begun to give up some of its gains.

Shares of PVH Corp., home to Calvin Klein, Tommy Hilfiger and other clothing brands, slid 4.1% to $89.31. Nordstrom declined 1.8% to $44.20. Gap fell 1.4% to $23.66.

Traders also had their eye on companies that issued outlooks for their upcoming earnings reports.

Pandora Media jumped 6.3% to $12.76 after the Oakland streaming music company issued a strong revenue forecast. The company also said it will cut about 7% of its U.S. jobs to reduce costs.

HomeStreet fell 6% to $29.10 after the real estate lender forecast disappointing fourth-quarter results. It took in fewer mortgage applications as interest rates began rising.

GameStop tumbled 8.1% to $22.73 after the video game retailer said holiday revenue dropped because of discounts and weak sales of new “Call of Duty” and “Titanfall” games.

Meanwhile, Dexcom jumped 25.9% to $85.13 after the San Diego company said Medicare will cover its blood-glucose monitoring system for diabetes patients.

Energy prices were mixed.

Benchmark crude oil fell 64 cents, or 1.2%, to close at $52.37 a barrel. Brent crude, which is used to price oil sold internationally, slid 56 cents, or 1%, to close at $55.45 a barrel.

The slide in crude prices helped pull down shares in energy sector stocks.

Oilfield services company Baker Hughes slid 2.4% to $60.92, drilling services company Transocean declined 2.3% to $15.48 and Marathon Petroleum fell 1.8% to $48.38.

In other energy trading, wholesale gasoline was little changed at $1.61 a gallon, and heating oil fell 2 cents to $1.65 a gallon. Natural gas futures rose 3 cents to $3.42 per 1,000 cubic feet.

Major stock indexes in Europe closed higher. Germany’s DAX rose 0.9%, France’s CAC 40 gained 1.2% and Britain’s FTSE 100 advanced 0.6%.

Earlier in Asia, some markets finished lower on disappointing trade data from China. Hong Kong’s Hang Seng index gained 0.5%. Japan’s Nikkei 225 index rose 0.8%. South Korea’s Kospi fell 0.5%. Meanwhile, Australia’s S&P/ASX 200 slumped 0.8%.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.39% from 2.36%.

In currency trading, the dollar fell to 114.42 yen from 114.63 yen. The euro strengthened to $1.0646 from $1.0626.

Gold fell $3.60 to $1,196.20 an ounce. Silver fell 6 cents to $16.77 an ounce. Copper rose 2 cents to $2.69 a pound.

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UPDATES:

2:45 p.m.: This article was updated throughout with closing prices, analyst comment and context.

8 a.m.: This article was updated throughout with later market results and additional details.

This article was originally published at 7 a.m.