Dow Jones industrials breach 24,000 in broad market rally

NEW YORK (AP) —Investors are exuberant and for good reason: the global economy is strong, corporate earnings are solid, Washington appears closer to delivering lower taxes on corporations and is signaling less restrictive oversight of the financial sector.

 

December 1, 2017



NEW YORK (AP) —Investors are exuberant and for good reason: the global economy is strong, corporate earnings are solid, Washington appears closer to delivering lower taxes on corporations and is signaling less restrictive oversight of the financial sector.

Thanks to that enthusiasm, Wall Street finished November with a broad rally that gave the Dow Jones industrial average its biggest gain since March and pushed it past the 24,000 mark for the first time.

Other market indicators also reached milestones on Thursday. The Standard & Poor’s 500 index, which is widely followed by professional investors, had its biggest monthly gain since February.

Technology stocks, the biggest driver of the market’s increase this year, were responsible for much of the gain, rebounding from a sharp pullback the day before. Financial stocks slowed a bit, but remain in the midst of a weeklong rally sparked by rising interest rates and encouraging words from regulators.

Investors were encouraged by the latest batch of economic data pointing to a pickup in global and domestic demand. But the run-up in the market really kicked in after developments in Washington gave traders fresh optimism that the Republican-led effort to forge a sweeping tax cut bill will succeed.


“A parade of data have surprised to the upside and that’s helped underpin the market’s tone,” said Quincy Krosby, chief market strategist at Prudential Financial. “But clearly the move toward tax reform, moving through the hurdles, has the market poised for a tax reform package to be legislated either at the end of this year or early next year.”

The S&P 500 index climbed 21.51 points, or 0.8 percent, to 2,647.58. The Dow jumped 331.67 points, or 1.4 percent, to 24,272.35. The average was briefly up more than 387 points.

The Nasdaq added 49.58 points, or 0.7 percent, to 6,873.97. The Russell 2000 index of smaller-company stocks picked up 1.84 points, or 0.1 percent, to 1,544.14. The major stock indexes all ended November with gains.

Stocks are being driven higher by a healthy economic backdrop and by the prospect that policy changes will fatten corporate profits.

The global economy is gathering momentum and a falling dollar has made American-made products cheaper overseas, benefiting U.S. corporations. And recent economic data have given investors more reason to feel bullish.

The Commerce Department reported this week that the U.S. economy grew at a 3.3 percent annual pace from July through September, the fastest in three years. Consumer spending and incomes posted healthy gains in October, the Labor Department reported Thursday.


American consumers, whose spending accounts for 70 percent of U.S. economic output, are in the sunniest mood since 2000, their disposition brightened by a healthy job market. The unemployment rate is at a 17-year low 4.1 percent.

The encouraging economic picture has pushed the yield on the 10-year Treasury higher. It climbed Thursday to 2.41 percent from 2.39 percent late Wednesday.

Banks and other financial companies posted solid gains. Goldman Sachs Group rose $6.28, or 2.6 percent, to $247.64.

Crude oil prices recovered from an early afternoon slide after OPEC and a group of allied oil-producing nations agreed to prolong crude output cuts until the end of next year. The move extends a policy that has helped lead to a significant rise in the price of oil over the past year.

Benchmark U.S. crude added 10 cents to settle at $57.40 per barrel on the New York Mercantile Exchange. Brent crude, used to price international oils, gained 46 cents, or 0.7 percent, to close at $63.57 a barrel in London. In other energy futures trading, wholesale gasoline was little changed at $1.73 a gallon. Heating oil shed 3 cents to $1.89 a gallon. Natural gas fell 15 cents, or 4.8 percent, to $3.03 per 1,000 cubic feet.

The dollar rose to 112.53 yen from 111.82 yen on Wednesday. The euro strengthened to $1.1896 from $1.1863.

Gold fell $8.90, or 0.7 percent, to $1,273.20 an ounce. Silver dropped 8 cents to $16.38 an ounce. Copper was little changed at $3.04 a pound.

Major stock indexes in Europe declined. Germany’s DAX slipped 0.3 percent, while France’s CAC 40 fell 0.5 percent. London’s FTSE 100 lost 0.9 percent.

Earlier in Asia, Hong Kong’s Hang Seng index gave up 1.5 percent, while Tokyo’s Nikkei 225 gained 0.6 percent. Seoul’s Kospi fell 1.4 percent. Sydney’s S&P-ASX 200 declined 0.7 percent. India’s Sensex lost 1.4 percent.

 
 

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