By Noel Randewich
U.S. stocks rose on Tuesday with the Dow nearing 20,000, a level it has never breached, in a rally fuelled by optimism about President-elect Donald Trump's policies.The Nasdaq and the Dow Jones industrial average had hit fresh intra-day records, with the blue-chip index just 37 points short of scaling the historic mark.Goldman Sachs (GS.N), which was up 1.8 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 the S&P 500 gaining more than 6 percent on bets that Trump's plans for deregulation and infrastructure spending will boost the economy."The market is focused on the Trump agenda, which is tax cuts, infrastructure spending and deregulation," said Jeff Zipper, managing director for investments at Private Client Reserve at U.S. Bank in Palm Beach, Florida. Some investors believe stocks have become expensive. The S&P 500 is trading at about 17 times expected earnings, well above its 10-year average of 14, according to Thomson Reuters Datastream.
The Dow's 20,000 level represents a major milestone on Wall Street and some investors believe that piercing that level would signal the recent rally may continue. The Dow first hit 10,000 in 1999."To have enough energy to push through that barrier would mean there's a lot of buying power in the system," said Brad McMillan, Chief Investment Officer for Commonwealth Financial Network. "Once we do crack through, that ceiling will tend to become a floor." At 2:31 p.m. (1931 GMT), the Dow Jones industrial average .DJI was up 0.4 percent to 19,962.94 and the S&P 500 .SPX had gained 0.27 percent to 2,268.66.
The Nasdaq Composite .IXIC added 0.38 percent to 5,477.91.Seven of the 11 major S&P sectors were higher, with the financial index's .SPSY 0.97 percent rise leading the advancers.Wells Fargo (WFC.N) rose 1.54 percent and Citigroup (C.N) added 1.27 percent.
The consumer discretionary index .SPLRCD rose 0.85 percent.General Mills (GIS.N) fell 2.91 percent after the Cheerios cereal-maker's quarterly results missed expectations.Advancing issues outnumbered declining ones on the NYSE by a 1.61-to-1 ratio; on Nasdaq, a 1.57-to-1 ratio favoured advancers.The S&P 500 posted 35 new 52-week highs and no new lows; the Nasdaq Composite recorded 212 new highs and 29 new lows. (Additional reporting by Tanya Agrawal in Bengaluru; Editing by James Dalgleish)
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Updated Date: Dec 21, 2016 02:15:16 IST