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Stocks close higher as traders bet on strong earnings season

CNBC logo CNBC 10/13/2017 Fred Imbert

Stocks ended higher Friday as traders bet on another strong earnings season.

The Dow gained 30 points, the S&P 500 rose 0.09 percent, and the Nasdaq added 0.22 percent. The Nasdaq set a new closing high.  

"We've had three good quarters in a row for earnings, if you go back to the fourth quarter of 2016," said Ernie Cecilia, CIO at Bryn Mawr Trust. "Last quarter, we also saw an improvement in revenue growth as it moved ahead of its long-term trend, which is a positive."

Corporate earnings for the S&P 500 have grown 6.1 percent, 15.5 percent and 10.8 percent in the fourth quarter of last year and the first and second quarters of 2017, respectively.

Earnings are expected to grow by 4 percent for the third quarter, according to S&P Capital IQ.

"Our early read on the overall results remains positive with 87% of the early 3Q 2017 reporters beating EPS estimates," said Nick Raich, CEO of The Earnings Scout, in a note to clients.

Shares of Bank of America briefly rose more than 1 percent on earnings and revenue that topped expectations. 

JPMorgan Chase and Citigroup also posted stronger-than-expected quarterly results Thursday.

Streaming giant Netflix is set to report its quarterly results Monday after the bell and Goldman Sachs is betting on a strong report.

Analysts at Goldman raised their price target on Netflix shares to $235 from $200 a share, noting: "We believe consensus subscriber estimates for Netflix ahead of Monday's earnings remain too low, particularly for the quarter, 4Q, and beyond."

Shares of Netflix advanced nearly 2 percent before the bell.

Wall Street also digested lighter-than-expected economic data in the form of inflation and retail sales numbers. The consumer price index rose 0.6 percent last month, below the expected gain of 0.7 percent. Retail sales, meanwhile, gained 1.6 percent, while analysts polled by Reuters expected a gain of 1.7 percent.

Treasury yields fell on the news, with the benchmark 10-year yield trading at 2.28 percent.


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