By Tanya Agrawal
The Dow and the Nasdaq hit record highs on Tuesday, with the blue-chip index just 13 points shy of the 20,000 mark, a level it has never scaled.Goldman Sachs, which was up about 1 percent, gave the biggest boost to the Dow.U.S. stocks have been on a tear since the Nov. 8 presidential election, with the Dow up 9 percent and S&P more than 6 percent on bets that President-elect Donald Trump's plans for deregulation and infrastructure spending will boost the economy."It's just the momentum since the election," said Jeff Zipper, managing director for investments at Private Client Reserve at U.S. Bank in Palm Beach, Florida."The market is focused on the Trump agenda, which is tax cuts, infrastructure spending and deregulation. There's not a lot of selling going on."However, trading volumes were muted as the last full trading week before the holiday season gets underway where movements may be pronounced. There are also concerns that the post-election rally may have gone too far too soon.
"I think we're a little bit concerned that market trends may be extended a little bit and market prices need to convert to fair value, and it's not unusual to see a pullback after such a move," said Zipper.The S&P 500 is trading at 17.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.At 11:08 a.m. ET (1608 GMT) the Dow Jones industrial average was up 83.92 points, or 0.42 percent, at 19,966.98.The S&P 500 was up 8.69 points, or 0.38 percent, at 2,271.22. The index came within 5 points of its record high.
The Nasdaq Composite was up 25.67 points, or 0.47 percent, at 5,483.11.Eight of the 11 major S&P sectors were higher, with the telecommunications index's 0.99 percent rise leading the gainers.The financial index was also up 0.93 percent. The index has risen 18.5 percent since the election, buoyed by Trump's deregulation plans and the prospect of higher interest rates.Brent oil prices rose by $1 to a one-week high on forecasts of a steep draw in U.S. crude stocks that could indicate global oversupply is starting to shrink. [O/R]
The dollar climbed to a 14-year high after Federal Reserve Chair Janet Yellen's comments about the labor market reinforced the notion of a faster pace of U.S. interest rate hikes next year than had been expected.General Mills fell 3.3 percent to $61.00 after the Cheerios cereal-maker's quarterly results missed expectations.Nvidia was up 3.9 percent at $105.59 after brokerages Goldman Sachs and Mizuho raised their price targets on the chipmaker's stock. The stock was among the big Nasdaq boosters.Advancing issues outnumbered decliners on the NYSE by 1,914 to 901. On the Nasdaq, 1,819 issues rose and 858 fell.The S&P 500 index showed 29 new 52-week highs and no new lows, while the Nasdaq recorded 164 new highs and 20 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva and Saumyadeb Chakrabarty)
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Updated Date: Dec 20, 2016 22:45:08 IST