The S&P 500 rose on Friday after major U.S. banks kicked off the fourth-quarter earnings season with strong results, helping fuel confidence about a recent market rally.
Wall Street has surged since President-elect Trump's unexpected election victory on optimism he will cut corporate taxes, spend on infrastructure and deregulate banks.
With stocks trading at valuations well above historic averages, many investors believe further gains will depend on S&P 500 companies handing in strong report cards over the next several weeks.
Major banks on Friday did not disappoint: Bank of America (BAC.N), JPMorgan (JPM.N) and Wells Fargo (WFC.N) all posted quarterly profits above analysts' expectations. They also expressed optimism about 2017 in their first public comments about earnings since Trump won the election in November.
Their shares surged over 2 percent but later gave up most of those gains. Wells Fargo was 1.04-percent higher and JPMorgan added 0.43 percent.
The S&P financial sector has jumped about 17 percent since the election, outpacing the S&P 500's 6.1 percent rise.
"Earnings are key going forward, and we're off to a decent start," said Mike Baele, managing director with the Private Client Reserve of U.S. Bank in Portland, Oregon.
The Dow declined, with McDonald's (MCD.N) and other consumer stocks down after a report showed U.S. retail sales and core retail sales increased less than expected in December.
Trading volumes were light ahead of a three-day weekend.
At 2:42 pm ET, the Dow Jones Industrial Average .DJI was down 0.14 percent at 19,863.26 points, while the S&P 500 .SPX had gained 0.10 percent to 2,272.67.
The Nasdaq Composite .IXIC added 0.39 percent to 5,569.18.
The biggest boost to the S&P 500 and the Nasdaq was from Facebook (FB.O), which jumped 1.6 percent after Raymond James upgraded the stock.
The combined profit of S&P 500 companies is expected to have risen 6.2 percent in the fourth quarter, according to Thomson Reuters I/B/E/S.
"We've come a long way very quickly so there's scope for a pullback, but overall the outlook for 2017 is relatively positive," said Jon Adams, senior investment strategist at BMO Global Asset Management.
Advancing issues outnumbered declining ones on the NYSE by a 1.49-to-1 ratio; on Nasdaq, a 2.06-to-1 ratio favored advancers.
The S&P 500 posted 30 new 52-week highs and 3 new lows; the Nasdaq Composite recorded 113 new highs and 10 new lows.
(Additional reporting by Tanya Agrawal; Editing by Nick Zieminski)