Dow Jones sets historic close above 20,000
NEW YORK (Reuters) – US stocks climbed on Wednesday and the Dow Jones Industrial Average closed atop the 20,000 mark for the first time as solid earnings and optimism over US President Donald Trump’s pro-growth initiatives revitalized a postelection rally.
The Dow Jones Industrial Average rose 155.80 points, or 0.78 percent, to close at 20,068.51, the S& P 500 gained 18.30 points, or 0.80 percent, to 2,298.37 and the Nasdaq Composite added 55.38 points, or 0.99 percent, to 5,656.34.
Trump has made several business- friendly decisions since taking office on Friday, including signing executive orders to reduce regulatory burden on domestic manufacturers and clearing the way for the construction of two oil pipelines.
The S&P 500 and the Nasdaq Composite indexes also closed at record highs for a second consecutive session.
The Dow came within a point of the historic mark on Jan. 6, as investors banked on pro-growth policies and tax cuts many expect from the new administration.
However, the index had struggled in recent weeks as investors awaited clarity on the new administration’s policies grew cautious.
“It was definitely a milestone that the market has been focused on for really the better part of two months and you were starting to get a little bit of anxiety as to whether it was going to be surmounted or not,” said Julian Emanuel, equity strategist at UBS in New York.
“We are particularly encouraged to see financials acting well again because they have been the leadership.”
Trump marked the moment with a tweet from the official account of the office: “Great!#Dow20K.”
Sentiment was also lifted by better- than- expected fourth-quarter earnings. Of the 104 S&P 500 companies that have reported results through Wednesday morning, nearly 70 percent have beaten expectations, according to Thomson
Reuters. Earnings are expected to show growth of 6.8 percent for the quarter, the strongest in two years.
The 42-session surge from the Dow’s first close above 19,000 marks the second-shortest length of time between such milestones.
The most rapid rise was between 10,000 and 11,000 from March 29 to May 3, 1999, which took 24 days. The rise from 18,000 to 19,000 took the Dow 483 trading sessions.
The surge since Nov. 22, when the index closed above 19,000 for the first time, has been spearheaded by financial stocks, with Goldman Sachs and JPMorgan accounting for roughly 20 percent of the gain.
On Wednesday, Boeing hit a record high of $ 168.65 on strong earnings, giving the Dow its biggest boost before closing up 4.2 percent at $167.36 percent gain.
A 1.7-percent rise in financials paced the advance for the S& P 500, while names sensitive to a climb in interest rates – utilities, real estate and telecoms – lost ground.
Advancing issues outnumbered declining ones on the NYSE by a 1.82- to- 1 ratio; on Nasdaq, a 2.38-to-1 ratio favored advancers.
The S&P 500 posted 81 new 52-week highs and one new low; the Nasdaq Composite recorded 201 new highs and 13 new lows.
About 7.03 billion shares changed hands in US exchanges, higher than the 6.37 billion daily average over the last 20 sessions.