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Stocks close off record highs as earnings season gears up

CNBC logo CNBC 10/12/2017 Fred Imbert

Stocks ended off record highs Thursday as Wall Street assessed earnings from some of the top financial companies.

The Dow finished 31 points lower after hitting an intraday record.The Nasdaq also hit a record before closing 0.18 percent lower. The S&P 500 declined 0.17 percent after hitting an all-time high.

JPMorgan Chase reported third-quarter earnings and revenue that beat analyst expectations. The banking giant, however, also reported a 27 percent year-over-year decline in fixed income trading revenue.

Citigroup also posted better-than-expected quarterly results, driven by growth in its global consumer business.

Bruce McCain, chief investment strategist at Key Private Bank, said this earnings season is off to a good start. "There's kind of a general feeling that things are better than they have been, and that's being reflected in the earnings season," he said.

Other major financial companies slated to report this week include Bank of America and Wells Fargo.

Historically, this earnings season has been the best one for investors. Using hedge fund analytics tool Kensho, CNBC found the S&P 500 posts a gain of 2.3 percent on average 30 days after third-quarter earnings season begins, trading positive 79 percent of the time.

Equities have risen sharply this year, with the S&P 500 advancing 14 percent in that time period.

"There are two factors pushing the market higher," said Zhiwei Ren, managing director and portfolio manager with Penn Mutual Asset Management. "The economic data is the strongest we've seen in years. ... The second one is positioning. A lot of people are still underweight risk. So, when the market keeps going higher, it forces others to chase it."

Wall Street also set its sights on economic data Wednesday. The Labor Department said U.S. producer prices rose 0.4 percent last month and 2.6 percent in the 12 months through September.

Meanwhile, weekly jobless claims totaled 243,000, hitting a more than one-month low, the Labor Department also said.

Treasury yields slipped on Thursday. The two-year yield traded at 1.517 percent and the benchmark 10-year yield hovered around 2.33 percent.


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