Dow Crosses 20K for First Time Intraday
January 25 2017 - 10:03AM
Dow Jones News
By Riva Gold
The Dow Jones Industrial Average hit 20000 for the first time,
the latest milestone in the U.S. stock market's postelection
rally.
The Dow industrials have surged since Election Day, buoyed by
investors' bets that the administration of Donald Trump will pursue
policies such as tax cuts, regulatory rollbacks and infrastructure
spending that could improve the outlook for U.S. companies. The
index has risen roughly 8.6% since Nov. 8, notching several highs,
and closed above 19000 for the first time ever Nov. 22.
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The Dow industrials gained 118 points, or 0.6%, to 20031 shortly
after the opening bell. The S&P 500 gained 0.4%, and the Nasdaq
Composite rose 0.6%.
Boeing was the best performer in the blue-chip index, up 2%,
after beating expectations for earnings in the final quarter of the
year.
Elsewhere, shares of Seagate Technology added 17% after revenue
slid less than expected.
Haven assets were under pressure, with gold down 1.2% at
$1,196.90 an ounce and government bond yields close to their
highest this year.
Overseas, the Stoxx Europe 600 advanced 1.3% while Japanese
shares added 1.4% as a climb of more than 100 points in the Dow and
record finishes for the S&P and Nasdaq Composite on Tuesday
rippled through Europe and Asia.
Mining and manufacturing companies led the charge on Wall Street
Tuesday in a move some traders and analysts attributed to President
Donald Trump's plans to boost infrastructure projects. Mr. Trump
took steps to revive two oil pipeline projects and issued
directives that aim to ease regulations on infrastructure
developments and U.S. manufacturing.
"We're guardedly optimistic," said Michael Thompson, managing
director at S&P Global Market Intelligence. "The U.S. was
inexorably poised to move out of this kind of this slow growth
trajectory, and some of the policy changes are certainly going to
facilitate that, as long as the worst pitfalls are avoided."
He said he would watch any news on border-adjustment measures
carefully in the coming days.
In Europe, banks and financials were the best performers as bond
yields recovered and corporate earnings proved supportive. Shares
of Banco Santander gained 4.2% after the Spanish lender kicked off
Europe's bank earnings season with a bigger-than-expected rise in
fourth-quarter profit.
European bank shares have gained roughly 17% in the past three
months after a steep fall last summer. "The recovery in their stock
prices has probably been correct, but it's difficult to see how it
can go further," said Edward Smith, asset allocation strategist at
Rathbones.
"There are still problems in the recapitalization of Italian
banks, exposure to Italian and Eastern European loans, and yield
curves that are unlikely to steepen much more in Europe," he
said.
Europe's auto and construction and materials sectors also rose
sharply Wednesday, while the basic resources sector wobbled between
small gains and losses after closing at its highest since 2014.
In government bonds, the 10-year German bund yield rose to
0.384% Wednesday from 0.325%. A top European Central Bank official
said Tuesday the bank should start to wind down its massive
bond-purchase program soon.
"I am...optimistic that we can soon turn to the question of an
exit" from easy-money policies, said Sabine Lautenschläger, who
sits on the ECB's executive board.
Germany's Ifo business sentiment index separately came in below
forecasts, dropping unexpectedly at the start of the year.
The yield on the 10-year U.S. Treasury note edged up to 2.479%
from 2.471% after its biggest daily gain of 2017, while Japanese
government bonds came under selling pressure at 0.065%.
Chinese government bond yields neared their highest levels since
2015 after the central bank unexpectedly raised interest rates on a
type of special loans to certain financial institutions.
In currencies, the WSJ Dollar Index fell 0.2%, with the dollar
last down 0.5% against the yen and the British pound.
The Mexican peso reversed early losses to gain 0.2% with Mr.
Trump expected to announce plans shortly to expedite construction
of a wall along the Mexican border.
Brent crude oil fell 0.9% to $54.94 a barrel, while copper
futures pulled back from a 19-month high.
--
Amy Harder
,
Shen Hong
, Katherine Dunn and Tom Fairless contributed to this
article.
Write to Riva Gold at riva.gold@wsj.com
(END) Dow Jones Newswires
January 25, 2017 09:48 ET (14:48 GMT)
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