By Mark DeCambre and Victor Reklaitis, MarketWatch
Nasdaq touches first record since Nov. 29, joining S&P 500,
Dow
U.S. stocks on Thursday touched fresh record levels intraday
after the European Central Bank held its key rates steady but said
it would taper its asset-purchase plan in April, while leaving the
door open for an extension of its economic stimulus program "if
necessary."
Early trading has been choppy as equity investors attempt to
extend a multisession stock advance, which has been underpinned by
Donald Trump's election win a month ago. Wall Street is hopeful
that the Trump administration will offer policies that stimulate
economic growth and are bullish for equities.
Against that backdrop, stock investors have been mostly bullish
about the outlook for equities.
The Nasdaq Composite Index hit an all-time intraday trading high
of 5,419.68, joining the other main trading benchmarks which
notched trading records Wednesday. The tech-laden index hit its
first record since Nov. 29 and was most recently up 15 points, or
0.3% at 5,408 most recently.
The Dow Jones Industrial Average was up 16 points, or 0.1%, at
19,561, but briefly set an all-time trading high of 19,592.95, led
by sharp gains in banks including J.P. Morgan Chase & Co. (JPM)
and Goldman Sachs Group(GS).
The S&P 500 index also set an intraday record of 2,244.06,
but most recently was trading at break-even levels, with 6 of the
S&P 500's 11 sectors trading in positive territory, led by
gains in tech and materials shares.
Meanwhile, the small-cap Russell 2000 index also touched a
intraday high of 1,374.64 on Thursday and was trading around those
levels, up 0.8%.
Doug Cote, chief market strategist at Voya Investment
Management, said Thursday's moves represent a belief that Trump
will follow through with pro-growth policies he campaigned on. "The
market has rallied very strongly and is pricing in very quickly the
positive pro-growth policies of Trump," he said. Cote said his
price target for 2016 was 2250.
The early muted tone for markets was set by the ECB meeting.
"I think the biggest headline in the market is the ECB because
it looks like they are taking their foot off the accelerator," said
Jack Ablin, chief investment officer, at BMO Private Bank, He said
hope that the ECB would continue its stimulus program at full tilt
partially influenced Wednesday's rally. Signs that the ECB may be
scaling back now can be viewed as a negative for U.S. markets
because the ECB has been a big purchaser of U.S. assets, he
said.
"I argue that the ECB has more influence over the S&P 500
than the [Federal Reserve]," Ablin said.
The ECB said it would in April cut its asset-purchase program to
buying EUR60 billion ($64 billion) in bonds each month from EUR80
billion until the end of December 2017, "or beyond, if necessary,
and in any case until the Governing Council sees a sustained
adjustment in the path of inflation consistent with its inflation
aim." The ECB's targets inflation of near 2%.
Over the longer-term, the ECB's decisions may be viewed as
bullish to some because it implies healthier economies in Europe,
which are big trading partners with U.S. companies.
"At this point in the cycle tapering is viewed as a good thing
because it is seen as a sign of improvement," said Colin
Cieszynski, chief market strategist at CMC Markets, told
MarketWatch. He said volatility is likely as investors digest the
news.
One area of volatility for the market on Thursday was in
currencies.
The euro dropped precipitously against the dollar after an early
pop higher as the bounce from the ECB decision faded. The euro rose
0.7% to $1.0874, its highest level since Nov. 14. But it soon
turned lower
(http://www.marketwatch.com/story/dollar-buying-takes-a-breather-as-investors-look-ahead-to-central-bank-meetings-2016-12-08),
falling more than 1.5% to $1.0607.
Conversely, the U.S. dollar, as gauged by the ICE U.S. Dollar
Index, a measure of the greenback against half a dozen currencies,
was up 1% at 101.21, hovering around its 13-year highs. A stronger
dollar can serve as a drag for the domestic economy, eroding
revenue for companies selling products abroad.
"If President-elect Trump is trying to bolster economic growth
by improving the balance of trade toward exports then a stronger
dollar is just an additional headwind," Ablin said.
On Wednesday, the Dow and S&P 500 closed higher by 1.6% and
1.3%, respectively, as each gauge scored a record close
(http://www.marketwatch.com/story/dow-industrials-aim-for-fresh-all-time-high-2016-12-07).
The Nasdaq climbed 1.1%, finishing 0.1% shy of its all-time closing
high, achieved in late November.
Individual movers: Shares in Lululemon Athletica Inc.(LULU)
soared 18%. The Canadian seller of athletic apparel late Wednesday
posted better-than-expected earnings
(http://www.marketwatch.com/story/lululemon-jumps-on-strong-earnings-new-buyback-plan-2016-12-07)
and announced a new buyback plan.
Costco Wholesale Corp.(COST) declined 2.7% after the warehouse
club chain reported stronger-than-anticipated earnings
(http://www.marketwatch.com/story/costco-same-store-sales-rise-following-declines-2016-12-07)
late Wednesday.
Home builder Hovnanian Enterprises Inc.(HOV) fell 4.1% after
disappointing quarterly results from the home builder
Economic news: A report on U.S. weekly on employment showed that
jobless claims dropped by 10,000 to 258,000, matching forecasts and
extending a streak of claims below 300,000. The report continues a
trend that points to a healthy labor market.
See:Italy put a cloud over Europe, but there is a silver lining
for the ECB
(http://www.marketwatch.com/story/how-italys-no-vote-might-be-the-ecbs-silver-lining-2016-12-05)
The Federal Reserve entered the so-called blackout period
Tuesday ahead of its meeting Dec. 13-14, so there are no Fed
speakers on the docket.
Check out:
Other markets:Oil futures
(http://www.marketwatch.com/story/oil-prices-stabilize-as-investors-watch-for-china-data-2016-12-08)
traded higher, erasing some of this week's decline. European stocks
(http://www.marketwatch.com/story/european-stocks-edge-higher-as-ecb-decision-looms-2016-12-08)
have been trading higher, while Asian markets closed mostly higher
(http://www.marketwatch.com/story/asian-markets-catch-a-ride-on-wall-streets-record-wave-2016-12-07).
Gold futures were dropping, and a key dollar index was ticking
higher.
(END) Dow Jones Newswires
December 08, 2016 11:36 ET (16:36 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From Apr 2024 to May 2024
JP Morgan Chase (NYSE:JPM)
Historical Stock Chart
From May 2023 to May 2024