Dow passes 21,000
Market indexes reach new highs in single day.
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.
Wednesday’s rally was “a bit of market euphoria on the back of the president’s address to the joint session of Congress last night,” said Bill Northey, chief investment officer of the Private Client Group at U.S. Bank.
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. That’s the biggest single-day gain for the index, the benchmark favored by professional investors, since early November.
The Nasdaq composite index added 78.59 points, or 1.4 percent, to 5,904.03. Smallcompany stocks continued to outpace the rest of the market, a bullish signal on the economy. The Russell 2000 index rose 26.95 points, or 1.9 percent, to 1,413.64.
All four indexes closed at new all-time highs. Each had set new highs last month.
Banks were the biggest gainers amid heightened ex-
pectations 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.
Bond prices fell and yields rose after a key Federal Reserve official, New York Fed President William Dudley, said the case for raising interest rates had gotten stronger. The 10-year Treasury yield
rose to 2.46 percent from 2.40 percent late Tuesday.
Strong gains in major global stock indexes overnight and into early Wednesday hinted at the possibility of another milestone day for Wall Street.
Better-than-expected company earnings and outlooks from Lowe’s, Big 5 Sporting Goods and other companies also energized the market.
But it is the prospect of more profitable days ahead for corporate America that encouraged investors to pile into stocks.
On Tuesday night, Trump struck a less confrontational tone than usual and steered away from dramatically negative descriptions of the state of the U.S. economy. He also reaffirmed his pledges to reform taxes, cut red tape and increase spending on defense and infrastructure projects. Trump offered few details.
“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.
Financials led all other sectors in the S&P 500, climbing 2.8 percent. The sector is up 8.1 percent this year. JPMorgan Chase climbed $2.98, or 3.3 percent, to $93.60. Goldman Sachs rose $4.65, or 1.9 percent, to $252.71.
Traders bid up shares in several companies that reported strong quarterly results or outlooks.
Lowe’s climbed $7.08, or 9.5 percent, to $81.45, while Big 5 Sporting Goods gained $1.75, or 13 percent, to $15.20.
Shares of Builders FirstSource, a maker of building materials, jumped 12.4 percent, based on rising lumber prices. The stock gained $1.60 to $14.54.
Babcock & Wilcox Enterprises was among the biggest laggards. Shares of the energy sector supply company sank 37.4 percent after its latest
quarterly report card and guidance fell short of financial analysts’ expectations. The stock lost $6.17 to $10.33.
Etsy shares slumped 11.8 percent after the online crafts marketplace issued guidance that fell short of Wall Street’s expectations. The stock shed $1.43 to $10.69.
Markets overseas posted solid gains.
In Europe, Germany’s DAX rose 2 percent, while France’s CAC 40 gained 2.1 percent. Britain’s FTSE 100 picked up 1.6 percent. Earlier in Asia, Japan’s benchmark Nikkei 225 gained 1.4 percent and Hong Kong’s Hang Seng added 0.2 percent.
U.S. crude fell 18 cents to $53.83 a barrel in New York. Brent crude, used to price international oils, lost 15 cents to close at $56.36 a barrel in London.
The price of gold fell $3.90 to $1,250 an ounce. Silver added 2 cents to $18.44 an ounce. Copper rose 2 cents to $2.73 a pound.