Dow Beats All-Time High From January 09/20 15:56
Wall Street delivered another set of milestones Thursday as a wave of buying
sent U.S. stocks solidly higher, driving the Dow Jones Industrial Average above
the all-time high it closed at in January.
(AP) -- Wall Street delivered another set of milestones Thursday as a wave
of buying sent U.S. stocks solidly higher, driving the Dow Jones Industrial
Average above the all-time high it closed at in January.
The S&P 500, the benchmark for many index funds, also hit a new high,
eclipsing the peak it reached last month.
Technology stocks, banks and health care companies accounted for much of the
broad rally. Energy companies declined along with crude oil prices.
A weaker dollar, which helps U.S. exporters, and a mix of mostly encouraging
economic reports helped put investors in a buying mood, a turnaround from
earlier in the week when the U.S. and China each announced a new round of
tariffs on each other's goods, triggering a sell-off.
"Some of the economic data that came out today continued to show strength,"
said Lindsey Bell, an investment strategist with CFRA. "Given the strength in
the economy, backed by the stimulus from tax reform as well as just fiscal
stimulus in general, that should be able to offset some of the impact that
we're going to get from tariffs as we go into the end of the year."
The S&P 500 index rose 22.80 points, or 0.8 percent, to 2,930.75. The Dow
gained 251.22 points, or 1 percent, to 26,656.98. The Nasdaq composite climbed
78.19 points, or 1 percent, to 8,028.23. The Russell 2000 index of smaller
companies picked up 17.25 points, or 1 percent, to 1,720.18.
The Dow, S&P 500 and Nasdaq are on track to end the week with a gain.
The Dow and S&P 500 were on course to set record highs from the get-go
Thursday as investors pored through a batch of economic data.
The Labor Department's weekly tally of applications for unemployment aid was
lower than expected, with claims slipping last week to 201,000. That's the
lowest level since November 1969.
An economic index from the Federal Reserve's bank in Philadelphia also
topped forecasts, and the Conference Board's index of leading economic
indicators, designed to anticipate economic conditions three to six months out,
rose 0.4 percent last month. While that came in slightly below forecasts, it
still suggests the economy is on sure footing, said Tracie McMillion, global
head of asset allocation for Wells Fargo Investment Institute.
"With a (reading) that high it's very unlikely that there's a recession on
the horizon," McMillion said. "The U.S. market is responding to this foundation
of economic strength. Pair that with a dollar that has started to depreciate a
little bit and that's good news for U.S. companies that trade abroad."
A weaker dollar is particularly favorable for large-cap companies that do
business overseas, because it makes their products more competitive.
The dollar rose to 112.48 yen from 112.27 yen on Wednesday. In other
currency trading, the euro strengthened to $1.1776 from $1.1674. The British
pound climbed to $1.3268 from $1.3145.
Mixed data on U.S. home sales and mortgage rates weighed on homebuilding
The National Association of Realtors said sales of previously occupied homes
were flat in August after declining the previous four months. Separately,
mortgage buyer Freddie Mac said the average rate on 30-year, fixed-rate
mortgages jumped to 4.65 percent this week, the highest level since May.
William Lyon Homes tumbled 7.8 percent to $17.20.
Starting Monday, the U.S. will place a 10 percent tariff on another $200
billion worth of Chinese goods. The tariffs will rise to 25 percent on Jan 1.
Beijing has said it would take "counter measures," which includes hitting $60
billion worth of U.S. imports, including coffee, honey and industrial
chemicals, with retaliatory taxes.
"Part of why you're seeing such significant upside today is the amount of
the tariffs was less than expected," Bell said. "The market is still optimistic
that we will resolve this issue, perhaps not before the midterm (elections),
but hopefully before the end of the year."
Some of the biggest gains Thursday went to technology companies. Apple
gained 0.8 percent to $220.03, while Microsoft climbed 1.7 percent to $113.57.
Health care companies also posted solid gains. Cardinal Health rose 2.3
percent to $55.17.
Traders also had their eye on companies that reported quarterly results.
Herman Miller gained 6.8 percent to $39.80 after the furniture company
delivered a larger quarterly profit than analysts expected.
Red Hat slid 6.5 percent to $133.81 after the open-source software company's
sales disappointed investors.
Investors welcomed news that Under Armour will cut 400 jobs, or 3 percent of
its staff, and will spend more money on a restructuring plan. Shares in the
athletic apparel company jumped 6.6 percent to $20.
Canadian marijuana producer Tilray slumped 17.6 percent to $176.35 a day
after the stock soared 38 percent.
Bond prices rose. The yield on the 10-year Treasury fell to 3.06 percent
from 3.08 percent late Wednesday.
Gold rose 0.2 percent to $1,211.30 an ounce. Silver gained 0.2 percent to
$14.31 an ounce. Copper added $0.4 percent to $2.74 a pound.
Benchmark U.S. crude fell 0.4 percent to settle at $70.80 a barrel in New
York. Brent crude, used to price international oils, dropped 0.9 percent to
close at $78.70.
In other energy trading, heating oil gave up 0.8 percent to $2.23 a gallon,
wholesale gasoline lost 0.4 percent to $2 a gallon and natural surged 2.3
percent to $2.98 per 1,000 cubic feet.
Major indexes in Europe also notched solid gains Thursday. Germany's DAX
rose 0.9 percent, while France's CAC 40 climbed 1.1 percent. Britain's FTSE 100
added 0.5 percent.
Markets in Asia were mixed. Japan's Nikkei 225 finished flat. The Kospi in
South Korea added 0.7 percent. Hong Kong's Hang Seng index rose 0.3 percent.
Australia's S&P/ASX 200 dropped 0.3 percent. Shares fell in Taiwan but rose in
Indonesia, Thailand and Singapore.