Stocks push to records as econ­omy cruises

Richmond Times-Dispatch - - MONEY & MARKETS -

Stocks and bond yields punched higher Wed­nes­day, and U.S. in­dexes set records again, fol­low­ing more en­cour­ag­ing news on the U.S. econ­omy.

The Stan­dard & Poor’s 500 in­dex rose 11.67 points, or 0.5 per­cent, to 2,349.25. It’s the sev­enth straight gain for the in­dex and its long­est win­ning streak in 3½ years. The Dow Jones in­dus­trial av­er­age rose 107.45 points, or 0.5 per­cent, to 20,611.86. The Nas­daq com­pos­ite rose 36.87, or 0.6 per­cent, to 5,819.44. Seven stocks rose on the New York Stock Ex­change for ev­ery five that fell.

It’s a strik­ing re­ver­sal for the mar­ket from a year ago, when stocks around the world were tum­bling on wor­ries that an­other re­ces­sion was on the way. Since then, the econ­omy and job mar­ket have con­tin­ued to im­prove, along with cor­po­rate prof­its. And the mar­ket got a jolt of adrenaline in Novem­ber, when Don­ald Trump’s sur­prise White House vic­tory raised hopes for tax cuts and other busi­ness-friendly poli­cies from Wash­ing­ton.

Fed Chair Janet Yellen in­di­cated in tes­ti­mony be­fore a Con­gres­sional com­mit­tee that the cen­tral bank will likely ac­cel­er­ate its pace of in­creases if the job mar­ket re­mains healthy and in­fla­tion keeps climb­ing. The Fed has raised rates just twice in the last two years, af­ter hold­ing rates at nearly zero from late 2008 to help lift the econ­omy out of the re­ces­sion.

“What re­ally stuck out to me in Yellen’s tes­ti­mony was her adding em­pha­sis to the idea that as things cur­rently stand, even with­out fis­cal stim­u­lus, it would be pru­dent to hike sooner rather than later,” said Brian Ja­cob­sen, chief port­fo­lio strate­gist at Wells Fargo Funds Man­age­ment. “So if we do see tax cuts or in­fra­struc­ture spend­ing, they may need to quicken the pace of rate hikes. The bond mar­ket has clearly got­ten the mes­sage.”

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