Stocks surge
Investor optimism pushes major indexes to record highs, fueled by banks, energy
Investors bet big on U.S. stocks Wednesday, giving the market its biggest single-day gain in nearly four months and pushing the major indexes to record highs.
The Dow Jones industrial average rose above 21,000 points for the first time in what was the biggest gain for the blue-chip index so far this year.
Banks were the biggest gainers amid heightened expectations that an improving economy will lead to higher interest rates. Energy stocks also notched big gains. Utilities and real-estate stocks lagged. The dollar strengthened against the yen and euro and other major currencies. Bond prices fell, as did the price of crude oil and gold.
Optimism over corporate tax cuts, deregulation and other business-friendly policy proposals reiterated by President Donald Trump during a speech before Congress helped fuel the rally. Growing speculation that the Federal Reserve may soon elect to raise interest rates again also helped put traders in a buying mood.
“We’re seeing a strong risk-on rally in the face of rising expectations of Fed action as early as March based on a belief there will be a pro-growth agenda that gets enacted,” said Bill Northey, chief investment officer of the Private Client Group at U.S. Bank. “It’s been what I would characterize as a bit of market euphoria on the back of the president’s address to the joint session of Congress last night.”
The Dow jumped 303.31 points, or 1.5 percent, to 21,115.55. At one point, the 30-company average was up more than 356 points. The Dow hadn’t been up more than 300 points in one day since November. The Standard & Poor’s 500 index gained 32.32 points, or 1.4 percent, to 2,395.96. The Nasdaq composite index added 78.59 points, or 1.4 percent, to 5,904.03. “The market has shifted from being worried about lower growth for longer, to expecting more growth sooner rather than later,” said Chris Zaccarelli, chief investment officer for Cornerstone Financial Partners.