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Mining and raw materials lead broad stock rally

Stock traders follow prices, Thursday, Feb. 9, 2017,

Stock traders follow prices, Thursday, Feb. 9, 2017, at the New York Stock Exchange.  Credit: AP / Mark Lennihan

Mining and other raw materials companies led a broad rally in U.S. stocks late Friday afternoon, steering the major indexes toward record highs for the second day in a row.

Rising crude oil prices also gave energy companies a big boost. Investors kept their focus on strong company earnings and corporate deal news.

ON WALL STREET: At the close, the Standard & Poor’s 500 index was up 8.2 points, about 0.4 percent, at 2,316.1. The Dow Jones industrial average had gained nearly 97 points, about 0.5 percent, to 20,269.4. The Nasdaq composite rose nearly 19 points, about 0.3 percent, to 5,734.1.

OIL PRICES: As markets closed, benchmark U.S. crude gained 82 cents to $54.28 a barrel in electronic trading on the New York Mercantile Exchange. In London on the Intercontinental Exchange Europe, Brent crude, the benchmark for international oil prices, gained $1.03 to $56.66 a barrel.

EARNINGS AND TRUMP: Investors have focused on companies quarterly results lately as they size up corporate America’s growth prospects. Earnings are on track to mark the second-consecutive quarter of growth after a losing streak of five straight quarters. Beyond earnings, investors are also eying Washington D.C. for signs the Trump administration will deliver on the promised business-friendly policy proposals that helped drive a market rally last fall, including slashing government regulations and taxes.

ANALYST’S VIEW: “We’re about 70 percent, almost three quarters of the way through earnings season and about 75 percent of the companies have beat the targets,” said analyst Randy Frederick, vice president of trading and derivatives at Charles Schwab. “That’s the best number we’ve seen, in terms of beats, for the last three years.”

TRUMP ON TAXES: In a meeting with airline and airport executives, Trump vowed to roll back government regulations and said he would announce a plan in the next three weeks to reduce taxes for businesses. The comments were short on details, but encouraged investors who have been waiting to see how Trump follows through on campaign promises to boost economic growth.

ANALYST’S OPINION: “Ever since his victory in November, global stock markets have been steered by actions and rhetoric emanating from the new commander-in-chief,” said analyst Nicholas Teo of KGI Securities in Singapore. “The trigger event of last night’s jump clearly shows the willingness of the markets to give the man lots of ‘slack,’ extending Mr. Trump more time to execute his election promises.”

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