Stocks rise despite Trump impeachment
Investors encouraged by earnings reports
All three major U.S. stock averages hit records Thursday as upbeat corporate earnings helped investors look past concerns that President Donald Trump was impeached a day earlier.
The Dow Jones industrial average climbed 138 points, or 0.5%, to close at 28,377. The Standard & Poor’s 500 index rose 0.5% to end at 3,205, topping the 3,200 threshold for the first time. The technology-heavy Nasdaq Composite added 0.7% to finish at 8,887.
Stocks wavered in early trading after Trump became the third president in history to be impeached.
On Wednesday, the Democrat-led House of Representatives formally charged him with abuse of power and obstruction of Congress. He now faces a trial in the Republican-controlled Senate.
Investors, however, have brushed off the chances of a conviction since there is a Republican majority in the Senate, analysts said. “There just aren’t the votes in the Senate to remove Trump from office,” said Thomas Martin, senior portfolio manager at Atlanta-based GLOBALT Investments. “If there were, it would be much for meaningful for the markets. But it’s very partisan and will remain so.”
Wall Street sentiment was boosted by a string of encouraging earnings reports from technology, consumer goods and health care companies. Financial markets have extended gains heading into year-end in the wake of deescalating trade tensions between the U.S. and China. A limited “Phase 1” trade deal would remove a hurdle for companies that have exposure to overseas markets, analysts said.
Shares of Micron Technology jumped 4% after Chief Executive Sanjay Mehrotra projected that the current quarter would be the bottom of a financial downturn for the memory-chip manufacturer. Pharmacy operator Rite Aid,
meanwhile, surged 45% after posting a quarterly profit. Food maker Conagra rallied 18% after reporting upbeat results.
Shares of Dow component Cisco Systems rose 2.3% while UnitedHealth Group and Walgreens Boots Alliance both climbed more than 1%. Netflix and Facebook added 3.2% and 1.3%, respectively.
Wall Street also sorted through a batch of mixed economic data. The number of Americans filing applications for unemployment benefits fell from more than a two-year high last week. Initial claims for state unemployment benefits fell 18,000 to a seasonally adjusted 234,000 for the week ended Dec. 14, the Labor Department said Thursday.
Separately, the Philadelphia Federal Reserve’s business conditions index fell to 0.3 in December from 10.4 the prior month. Home buying, meanwhile, slumped in November amid rising prices. Sales of existing homes fell 1.7% last month to a seasonally adjusted annual rate of 5.35 million, the National Association of Realtors said.
Investors monitored central bank developments overnight. Sweden’s central bank became the first to exit negative rates Thursday, raising questions as to whether others with sub-zero rates will follow. The Bank of Japan and the Bank of England left interest rates unchanged. The British pound fell 0.4% against the dollar.
The yield on the 10-year Treasury held steady at 1.92%, unchanged from Wednesday.