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Dow rises to record but fails to hit 20,000 |

Dow rises to record but fails to hit 20,000

Wire Reports
| Tuesday, December 13, 2016 10:04 p.m

The final countdown to Dow 20,000 continues.

It’s taken nearly 120 years to get close to this point as the Dow Jones industrial average came within 47 points Tuesday of its biggest milestone yet: Dow 20,000.

The race to 20,000 for the blue chip stock index, which began way back in 1896, picked up speed after Election Day, as investors began to price in a better economy and stronger profit growth from U.S. companies because of President-elect Trump’s more business-friendly policies.

At its afternoon intraday record peak, the Dow was up more than 155 points, or 0.8 percent, to a high of 19,953.75, before pulling back slightly to close up 114.78 points, or 0.6 percent, to close at 19,911.21.

“Dow 20,000 is in sight, ” says Brad McMillan, chief investment officer for Commonwealth Financial Network. “I remember when the Dow hit 10,000. The index is now approaching double that level. If we get there, it should be exciting.”

All three major indexes established record highs. Nine of the 11 major S&P sectors rose, with the technology index climbing 1.23 percent. The index had lost 0.5 percent on Monday after posting its largest weekly advance in a year last week.

“What we’re seeing is the rally broaden out a little bit from beyond the Russell 2000 and the financial sector,” said Michael O’Rourke, chief market strategist at JonesTrading in Greenwich, Conn. “If you’re bullish, tech does look attractive here.”

Apple added 1.67 percent and provided the biggest support to the S&P and Nasdaq, while IBM rose 1.69 percent, helping lift the Dow.

Other tech giants Microsoft and Amazon were up 1.30 percent and 1.87 percent, respectively.

Some investors see the 20,000-level on the Dow as a psychologically important signal of broad positive sentiment.

The U.S. stock market’s sharp run has also been supported by positive economic data, including a strong labor market and S&P 500 companies’ results, which in the third quarter snapped a year-long earnings recession.

“Investors are encouraged by expectations that Trump and a GOP-controlled Congress will enact pro-growth policies and we’re seeing modest inflation creep in while housing remains stable and wages continue to firm,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management.

The Fed will announce its interest rate decision when it ends its policy meeting Wednesday. It would be only the second increase in a decade if the Fed hikes its key interest rate. The Fed has kept rates near zero since the 2008 global crisis, but its leaders have indicated the economy is improving enough to start moving gradually toward normal policy. Low interest rates have helped to boost stock prices but are hurting savers who look for income from bank accounts and bonds.

“The Fed’s projections and dot plot combined with Chair Janet Yellen’s comments in the press conference could be crucial in determining whether the Santa rally makes it to the new year,” said Craig Erlam, senior market analyst at OANDA. “Investors haven’t been easily spooked recently, but the prospect of three or four rate hikes next year may be enough to do it.”

Global stock markets rose Tuesday as China reported relatively strong industrial output for November.

Chinese economic data for November showed relatively strong activity. Industrial production grew 6.2 percent from a year ago, up from October’s 6.1 percent.

“Another set of broadly positive data suggest that China is on track to end this year on a strong note,” said Julian Evans-Pritchard of Capital Economics in a report.

Categories: Wire stories
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