By Yashaswini Swamynathan, Rodrigo Campos and Chuck Mikolajczak
(Corrects paragraph 13 to show year of fastest interval between 1,000 point milestones was 1999; the year was missing in earlier version)By Yashaswini Swamynathan, Rodrigo Campos and Chuck MikolajczakThe Dow Jones Industrial Average marched higher after hitting 20,000 for the first time on Wednesday as strong earnings and President Donald Trump's pro-growth initiatives reignited a post-election rally.Trump has made several business-friendly decisions since taking office on Friday, including signing executive orders to reduce regulatory burden on domestic manufacturers and clearing the way for the construction of two oil pipelines. The S&P 500 and the Nasdaq Composite indexes also hit record highs. The Dow came within a point of the historic mark on Jan. 6, as investors banked on pro-growth policies and tax cuts many expect from the new administration. However, the index had struggled in recent weeks as investors grew cautious as they looked for clarity on the new administration's policies. "Trump has a majority of both houses, so the likelihood of things getting done quicker than they usually do is higher," said Mark Spellman, portfolio manager at Alpine Funds. "He can fast-track a lot of policies which is typically not the case."
Trump, a real estate mogul and a former reality television star, marked the moment with a tweet: "Great!#Dow20K".Sentiment was also lifted by better-than-expected fourth-quarter earnings. Of the 104 S&P 500 companies that have reported results so far, nearly 70 percent have beaten earnings expectations, according to Thomson Reuters I/B/E/S.Fourth-quarter earnings will likely show growth of 6 percent, markedly better than any quarter over the last year or so, said Bruce McCain, chief investment strategist at Key Private Bank in Cleveland. "So the fundamentals are clearly improving," he said.
If the Dow remains above 20,000 by closing time, the 42-session surge from the first close above 19,000 would mark the second-shortest length of time between such milestones. The most rapid rise was between 10,000 and 11,000 from March 29 to May 3, 1999 which took 24 days. The rise from 18,000 to 19,000 took the Dow 483 trading sessions.The surge since Nov. 22, when the index closed above 19,000 for the first time, has been spearheaded by financial stocks - with Goldman Sachs (GS.N) and JPMorgan (JPM.N) accounting for about 20 percent of the gain. On Wednesday, Boeing (BA.N) hit a record high of $168.18 on strong earnings, giving the Dow its biggest boost. Goldman Sachs (GS.N) was the second biggest influence on the index, with a 1 percent gain.
At 12:59 p.m. ET (1759 GMT), the Dow .DJI was up 148.2 points, or 0.74 percent, at 20,060.91 - on track for its best day since Dec. 7.The S&P 500 .SPX was up 15.08 points, or 0.66 percent, at 2,295.15 and the Nasdaq Composite .IXIC was up 43.53 points, or 0.78 percent, at 5,644.49.Nine of the 11 major S&P 500 sectors were higher, led by a 1.33 percent rise in financials .SPSY. Real estate .SPLRCR and telecom services .SPLRCL - defensive parts of the market - were the outliers. Advancing issues outnumbered decliners on the NYSE by 1,847 to 1,034. On the Nasdaq, 1,894 issues rose and 891 fell.The S&P 500 index showed 76 new 52-week highs and one new low, while the Nasdaq recorded 174 new highs and 10 new lows. (Reporting by Yashaswini Swamynathan; additional reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)
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Published Date: Jan 26, 2017 02:00 AM | Updated Date: Jan 26, 2017 02:00 AM