Wall Street Closes at Record Highs as Financials Lead Rebound

The three major U.S. stock indexes rallied to record closing highs on Friday as financials and other economically focused sectors rebounded after a selloff sparked by growth worries earlier in the week.

The week also saw a sharp rally in U.S. Treasuries as investors worried the U.S. economic recovery might be losing steam with the Delta variant of the coronavirus spreading.

S&P financials led sector gains followed by energy, materials and industrials.

"What an about-face from all of the gloom and doom from yesterday," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

Unofficially, the Dow Jones Industrial Average rose 446.29 points, or 1.3%, to 34,868.22, the S&P 500 gained 48.44 points, or 1.12%, to 4,369.26 and the Nasdaq Composite added 139.83 points, or 0.96%, to 14,699.61.

Big banks will be among the first to report quarterly earnings, with the season kicking off next week. A big jump in quarterly earnings is expected to mark a peak for U.S. profit growth in the recovery from last year's pandemic-induced collapse.

Analysts expect earnings growth of 65.8% for companies in the S&P 500 index in the quarter, up from a previous forecast of 54% growth at the start of the period, according to Refinitiv IBES data.

Among individual stocks, Levi Strauss & Co rose as it forecast a strong full-year profit after beating quarterly earnings estimates on improving demand across its markets for jeans, tops, and jackets.

U.S.-listed shares of Chinese ride-hailing company Didi Global Inc gained after four sessions of losses, as it was recently hit by an investigation from China's internet watchdog.