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January 26, 2017

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Dow Jones trades over 20,000 for first time

Source: Agencies | January 26, 2017, Thursday | Print Edition

THE Dow Jones Industrial Average traded above 20,000 points for the first time yesterday, resuming a rally that began in the wake of US President Donald Trump’s surprise election victory.

The rally roared back to life after Trump signed numerous executive orders on Tuesday, including clearing the path for the construction of two oil pipelines to boost the energy industry.

The S&P 500 and the Nasdaq Composite indexes also hit record intraday highs.

“Great!#Dow20K,” Trump tweeted.

The Dow came within a point of the historic mark on January 6, as investors banked on pro-growth policies and tax cuts many expect from the new administration.

“Trump’s been on the job for five days and he’s a man of action,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago.

“That should get everyone confident he’ll get those three other things done ... which is taxes, trade and regulation.”

Investors said crossing the 20,000 mark was just a number, but still nice to have.

“While the Dow hitting 20,000 is one of the least meaningful data points on my screen, it does suggest that the equity rally is pretty broad-based,” said Michael Purves, chief global strategist at Weeden & Co in New York.

The venerable index had stalled recently, dropping modestly in consecutive weeks, as investors grew cautious as they looked for clarity on the administration’s new policies.

The surge since November 22, when the index closed above 19,000 for the first time, has been spearheaded by financial stocks — with Goldman Sachs and JPMorgan accounting for about 20 percent of the gain.

Yesterday, Boeing rose 2.7 percent after its earnings and IBM gained 1.4 percent, helping to push the index over the top. Goldman rose 0.7 percent.

In early trading, the Dow rose more than 0.7 percent to 20,054.04 points. The S&P 500 gained 0.6 percent and the Nasdaq Composite added 0.75 percent.

Earlier in China, the benchmark Shanghai Composite Index rose for the fourth straight day, ending 0.22 percent higher at 3,149.55 points.

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