By Tanya Agrawal
U.S. stocks eased off their session highs in early afternoon trading on Tuesday, but the Dow was still within spitting distance of 20,000, a level it has never breached. The Nasdaq and the Dow had hit fresh records earlier in the day, with the blue-chip index falling just 13 points short of scaling the historic mark.Goldman Sachs (GS.N), which was up 1.1 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 the S&P 500 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, 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.
"We're a little bit concerned that market trends may be extended a little bit and market prices need to convert to fair value," Zipper said. "It's not unusual to see a pullback after such a move."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 12:46 p.m. ET (1746 GMT) the Dow Jones Industrial average .DJI was up 77.46 points, or 0.39 percent, at 19,960.52.The S&P 500 .SPX was up 6.69 points, or 0.29 percent, at 2,269.22. The index came within five points of its intraday high of 2,277.53.
The Nasdaq Composite .IXIC was up 23.38 points, or 0.43 percent, at 5,480.82.Eight of the 11 major S&P sectors were higher, with the financial index's .SPSY 0.81 percent rise leading the advancers.Wells Fargo (WFC.N), Bank of America (BAC.N) and Citigroup (C.N) boosted the sector.The index has risen about 18 percent since the election, buoyed by Trump's deregulation plans and the prospect of higher interest rates.
The consumer discretionary index .SPLRCD was also up 0.80 percent.Brent oil prices rose 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. The dollar climbed to a 14-year high after Federal Reserve Chair Janet Yellen's comments about the labour market reinforced the notion of a faster pace of U.S. interest rate hikes next year than had been expected.General Mills (GIS.N) fell 3.2 percent to $61.01 after the Cheerios cereal-maker's quarterly results missed expectations.Advancing issues outnumbered decliners on the NYSE by 1,819 to 1,077. On the Nasdaq, 1,769 issues rose and 1,023 fell.The S&P 500 index showed 34 new 52-week highs and no new lows, while the Nasdaq recorded 180 new highs and 24 new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Saumyadeb Chakrabarty and Anil D'Silva)
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Updated Date: Dec 22, 2016 15:09:55 IST