Industrials lead Dow to record high; tech boosts S&P, Nasdaq

Mae Love
September 22, 2018

A wave of buying sent US stocks solidly higher, pushing the Dow Jones Industrial Average above the all-time high it reached in January. Sentiment on Wall Street was also boosted as investors bet that a trade war between the USA and China will not be as bad as previously feared.

Despite repeated warnings of the coming end of the bull market, the US' main indexes hit new record highs yesterday (20 September).

Technology stocks, banks and health care companies accounted for much of the rally.

"The market is showing incredible strength", said Paul Hickey, co-founder of Bespoke Investment Group.

-China tariff tensions. The Dow was up aboyt 110 points at the open, or 0.4%, at 26,357, putting the blue-chip benchmark less than 1% short of its all-time high of 26,616.71 that was hit on January 26.

"Quadruple witching", when stock options and futures expire, and the S&P 500 and the Russell 2000 rebalance of their indexes, were also seen contributing to heavier trading traffic.

The road to the latest records was hardly smooth.

Rises in market interest rates tend to boost banks and the S&P financial sector rose 1.52 percent, lifted by a 2.4 percent increase in shares of JPMorgan & Chase.

-China trade dispute on the big industrial companies that are part of the Dow. The gains have helped boost investors' stock holdings.

United States stocks ended the week mixed.

In Asia, markets closed mostly higher. The richest one-tenth of Americans own about 84 percent of the value of stocks.

The S&P 500 posted 41 new 52-week highs and no new lows; the Nasdaq Composite recorded 53 new highs and 38 new lows. That's the lowest level since November 1969.

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The Nasdaq also closed higher on Thursday, rising just less than 1% to close above 8,000, but short of a record close.

"With a (reading) that high it's very unlikely that there's a recession on the horizon", McMillion said.

The dollar rose to 112.52 yen from Thursday's 112.48 yen. The euro edged down to $1.1747 from $1.1776. Meanwhile, existing-home sales flattened last month at a seasonally adjusted annual rate of 5.34 million units, the National Association of Realtors said, down more than 1% from a year earlier. Copper surged 4.3 percent to $2.86 a pound.

William Lyon Homes tumbled 7.8 percent to $17.20. In retaliation, Beijing has moved to slap tariffs on more than 5,000 U.S. products, starting next week.

The technology sector dropped 0.39 percent, led by a 1.2 percent decline in Microsoft. Shares in the company slid 2.9 percent to $44.74.

The US stocks are ending the day mixed.

US stocks have risen over 10 percent year-to-date, while foreign stocks are down 3.5 percent. Higher rates typically benefit the financial sector, which was up 1.0 percent. Silver gained 0.4 per cent to $US14.36 an ounce.

Odds for a similar-sized rate hike at the central bank's December meeting have risen to almost 79 percent, according to CME Group data.

Benchmark U.S. crude fell 0.4 percent to settle at $70.80 a barrel in NY. Brent crude, used to price worldwide oils, added 0.1 percent to close at $78.80 a barrel in London.

The October natural gas contract was up 6.8 cents at US$2.98 per mmBTU.

Major indexes in Europe also notched solid gains Thursday. Germany's DAX added 0.8 percent, while France's CAC 40 rose 0.8 percent. Seoul's Kospi added 0.7 percent. Cimarex Energy rose 2.1 per cent to $US92.34. Australia's S&P/ASX 200 dropped 0.3 percent.

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