Dow Rises Nearly 100 Points
January 20 2017 - 4:40PM
Dow Jones News
By Riva Gold and Corrie Driebusch
U.S. stocks rose in choppy trading as Donald Trump was sworn in
as president.
The Dow industrials rose 95 points, or 0.5%, to 19827.
Stock-trading volume spiked during Mr. Trump's speech, according to
FactSet.
The S&P 500 and Nasdaq Composite gained 0.3%.
Government bonds also swung. The 10-year U.S. Treasury yield was
2.466% Friday compared with 2.500% ahead of Mr. Trump's speech and
2.461% Thursday. Yields move inversely to prices.
Markets have swung in recent sessions on comments by the new
president. On Tuesday, the dollar fell to its lowest level in a
month after Mr. Trump called the dollar "too strong." Last week,
health-care stocks dropped after he criticized the pharmaceutical
industry during his first press conference as president-elect.
"We're going to see high intraday volatility on off-the-cuff
remarks," said Tom Digenan, head of U.S. equities at UBS Global
Asset Management. "We don't know how onerous protectionist measures
will be, what the tax rate will be or what deregulation we'll
get."
On Friday, Mr. Trump said his administration would follow "two
simple rules: Buy American and hire American." It also promised new
roads, bridges and highways.
Since the November election, investors have broadly bought the
dollar and U.S. stocks and sold long-dated government bonds on
expectations for tax cuts, spending increases and rolled-back
regulation.
Wall Street analysts haven't matched investor expectations for
the impact of Mr. Trump's policies on earnings. Analyst earnings
estimates for S&P 500 companies in 2017 remain at about $133 a
share, roughly the same level as in October ahead of Mr. Trump's
victory, according to FactSet.
"There is reason to be optimistic and for stocks to go up,
though maybe not so quickly as sentiment pushed it in that
direction," said Paul Christopher, head global market strategist at
Wells Fargo Investment Institute.
Indeed, some popular trades have waned in the trading sessions
leading up to Mr. Trump's inauguration.
In the month following Nov. 8, the Dow industrials jumped 7%.
Since Dec. 8, however, the index has climbed 1%. On Thursday, the
blue-chip index erased its gains this year in its fifth consecutive
session of losses. Part of the reason for the reversal: a pullback
in big bank stocks.
Financials, the best-performing S&P 500 sector from Election
Day to year-end, lost ground in the past week as investors pulled
money out of the sector. On Friday, financials gained back a bit,
rising 0.5%, but the sector ended the week down 1.6% and is now
down 0.6% in 2017.
Financial-sector stock funds snapped a 16-week streak of inflows
and industrial-sector funds posted their biggest outflow since
2015, according to fund-tracker EPFR Global, reversing popular
trends that followed the November election.
Flows into gold funds hit a 10-week high. On Friday, gold for
January delivery rose 0.3% to $1,204.30 an ounce. Gold prices have
risen 4.7% so far this month.
The WSJ Dollar Index was down 0.3% on Friday.
Write to Riva Gold at riva.gold@wsj.com and Corrie Driebusch at
corrie.driebusch@wsj.com
(END) Dow Jones Newswires
January 20, 2017 16:25 ET (21:25 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.