Dow cruises ever closer to 20,000
Travel companies and banks boost the market, and some investors say stocks won’t move much in ’17.
Big gains for banks and companies that are focused on travel helped propel U.S. stock indexes to record levels Tuesday. The Dow Jones industrial average moved closer than ever to 20,000, but the symbolic threshold remained just out of reach.
Banks once again led the way as bond yields and interest rates bounced higher. Strong earnings from cruise line operator Carnival and gains for travel website TripAdvisor led consumer companies higher. Household goods makers fell after Cheerios maker General Mills cut its sales projections for the year, and energy companies fell for the second day in a row. That hadn’t happened in three weeks. The Dow came within 13 points of the 20,000 mark around 10 a.m. and closed about 25 points under the threshold. Trading remained light as the Christmas holiday approached.
Stocks have soared since the presidential election and the Dow has risen almost 1,000 points in less than a month, and some investors think that means stocks won’t move much in 2017.
“We’re at fair value,” said Scott Wren, a senior global equity strategist at the Wells Fargo Investment Institute. “This is not going to be a big return year for the stock market.”
The Dow gained 91.56 points, or 0.4 percent, to a record close at 19,974.62. The Standard & Poor’s 500 index picked up 8.23 points, or 0.4 percent, to 2,270.76. The Nasdaq composite also finished at a record as it added 26.50 points, or 0.5 percent, to 5,483.94. The Russell 2000 index of smallcompany stocks jumped 12.27 points, or 0.9 percent, to 1,383.96.
Bond prices reversed course and fell after climbing higher Monday. The yield on the 10-year Treasury note rose to 2.56 percent from 2.54 percent. Bond yields have risen sharply of late, and that’s good for banks because higher bond yields are linked to higher interest rates, which let them make more money from lending.
Cruise line operator Carnival reported profit and sales that were stronger than expected. The company said bookings for trips in 2017 are stronger than they were at this time last year.
Other consumer companies also gained ground. Used-car dealership Carmax jumped $3.80, or 6.1 percent, to $66.16 after a strong earnings report.
Benchmark U.S. crude gained 11 cents to $52.23 per barrel in New York. Brent crude, the international standard, jumped 43 cents to $55.35 a barrel in London.
The dollar climbed to 118.04 yen from 117.24 yen.