Dow adds 300 points following earnings beats, surprise retail sales gain

U.S. stock indexes rose on Friday as better-than-expected third-quarter earnings reports set the S&P 500 on track for a winning week.

The Dow Jones Industrial Average gained about 300 points, or 0.9%. The S&P 500 added 0.6% and the Nasdaq Composite rose 0.4%.

The Dow and the S&P 500 sat 1.2% and 1.8%, respectively, below their all-time highs.

Earnings momentum continued Friday as Goldman Sachs’ third-quarter results beat significantly on the top and bottom line. The bank stock gained more than 2%.

The stellar report came after earnings beats from other big banks earlier in the week. Financial heavyweights JPMorgan, Bank of America, Morgan Stanley and Citigroup were among the firms topping expectations.

“The banks painted a strong and healthy picture of the US consumer,” noted Edward Moya, senior market analyst at Oanda. “Wall Street can’t turn negative on the economy after seeing reserve releases, moderating trading revenue, mixed loan growth, and a consumer willing to take on debt.”

Retail sales posted a surprise increase in September, rising 0.7%. Economists polled by Dow Jones were expecting a 0.2% decline.

“The inflation environment and concerns about supply chains have not put a strong dent in retail sales,” said Yung-Yu Ma, chief investment strategist at BMO Wealth Management. “Consumers are acclimating to higher prices. So far that hasn’t resulted in a meaningful fall off in demand. But this willingness to absorb higher prices is not unlimited.”

Elsewhere, bitcoin crossed the $60,000 level as investors were optimistic about the chance of the U.S. Securities and Exchange Commission approving the first bitcoin futures exchange-traded fund.

The cryptocurrency’s jump added to positive market sentiment, suggesting risk-taking could pick up. Tesla and Coinbase shares rose.

The S&P 500 on Thursday posted its best daily performance since March 5, while the Dow had its best day since July and the Nasdaq Composite notched its best day since May.

All three averages are on track to end the week higher.

So far, 80.5% of the 41 S&P 500 companies that have reported third quarter results have topped earnings-per-share expectations, according to FactSet.

Taking into account these results and estimates for those yet to report, third-quarter profit growth increased 29.8%, FactSet analysis shows.