Dow Industrials Top 26000 for First Time
January 16 2018 - 10:07AM
Dow Jones News
By David Hodari
-- DJIA crosses 26,000 for the first time
-- Dollar rebounds after three-year low
-- Bitcoin selloff accelerates
The Dow Jones Industrial Average crossed 26000 for the first
time Tuesday, with U.S. stocks echoing broad-based gains in Europe
and Asia-Pacific as they continued their speedy leap higher.
The Dow Jones Industrial Average climbed 221 points, or 0.9%, to
26025 shortly after the opening bell. The S&P 500 added 0.5%,
and the Nasdaq Composite rose 0.7%. Meanwhile, the dollar rebounded
from Monday's three-year low.
Tuesday's historic rise builds on the Dow's 25% gain last year
and its seemingly unstoppable climb to start 2018. The rally began
in late 2016 as a bet on infrastructure spending, deregulation and
tax cuts, but spent 2017 rising on the back of strong corporate
earnings growth. The start of fourth-quarter reporting season,
which many money managers expect will again exceed analyst
expectations, has the potential to catapult the stock market even
higher, some fund managers say.
A selloff in bitcoin accelerated in early European trading, with
the cryptocurrency last 10.8% lower at $12,126.01, according to
CoinDesk. Bitcoin was priced at $14,000 in early Asian trading and
Tuesday's drop came after China and South Korea moved in recent
days to place restrictions on cryptocurrency trading.
The Stoxx Europe 600 added 0.3% in European afternoon trading,
with the index's industrial goods sector up 0.3% and its insurance
sector up 0.7%.
The euro was down 0.3% against the dollar, which hit a new
three-year low Monday.
That came despite the passage of a reform package through
Greece's parliament that moved Athens closer to an exit from its
bailout program.
A stronger euro is seen as negative for Europe's big
exporters.
With global companies comprising a significant portion of
Europe's major index, "a fall in the euro is a tailwind for those
companies, so that's part of the equation," said Alain Bokobza,
head of global asset allocation at Société Générale Corporate
Investment Banking.
Prospective U.S. gains and European buying followed a positive
close in Asia-Pacific markets. Hong Kong's Hang Seng closed 1.8%
higher, hitting a fresh record. The U.S. dollar clawed back some of
the value it lost Monday, with the WSJ Dollar Index, which measures
the currency against a basket of 16 others, up 0.2%, but down 2.7%
over the past month.
Japanese stocks rebounded from Monday's selloff, with a weaker
yen helping the country's exporters. The dollar gained 0.2% to
Yen110.7120, pushing the Nikkei to finish up 1% at a fresh 26-year
high. Taiwan's Taiex gained 0.3% to log another 28-year record and
New Zealand's NZX 50 closed 0.4% higher after four days of
losses.
In China, the Shanghai Composite was up 0.8%, rallying from
downbeat trading Monday and the Shenzhen Composite rose 0.7%.
Australia's S&P/ASX 200 slid 0.4%, with mining companies
falling as metals prices lost some of Monday's dollar-driven gains.
Rio Tinto closed 0.7% down, despite hitting a 6 1/2 -year high
earlier in the day after posting record production figures for
2017. BHP Billiton closed 0.8% down.
The pullback in Australia mirrored selling across the energy and
metals sectors. Brent crude oil was last down 1 at $69.59 a barrel
ahead of monthly U.S. drilling productivity numbers from the U.S.
Energy Information Administration. Elsewhere, London three-month
copper futures fell 1.9%. A stronger U.S. currency tends to make
dollar-denominated commodities more expensive for holders of other
currencies.
The dollar was buffeted by the yen, euro and yuan Monday after
less dovish remarks from the governor of the Bank of Japan,
progress in the German chancellor's attempts to build a coalition
government and optimistic remarks from China's prime minister ahead
of gross domestic product data, expected Thursday.
Against a backdrop of synchronized global economic growth, "it's
pretty clear that a lot of countries around the world are starting
to think slightly more hawkishly about growth data. You have some
central banks headed toward an exit from more accommodative
policies... [while] on the other side you have expected Fed rate
hikes which are already priced in, " said James Pomeroy, a global
economist at HSBC.
U.S. 10-year Treasury yields slipped to 2.534% from 2.551% late
Friday. Yields move inversely to prices.
Gregor Stuart Hunter,
Kevin Kingsbury
and Corrie Driebusch contributed to this article.
Write to David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
January 16, 2018 09:52 ET (14:52 GMT)
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