Sharechat Logo

While you were sleeping: Dow vaults over 25,000

Friday 5th January 2018

Text too small?

Wall Street rose, lifting the Dow above 25,000 points for the first time, as stronger-than-expected US jobs data bolstered sentiment about the pace of growth for the economy and corporate profits. 

The US dollar and Treasuries slid. 

An ADP Research Institute report showed US private employers added 250,000 jobs in December, well exceeding predictions for a 190,000 increase in separate surveys by Bloomberg and Reuters. Separately, a Labour Department report showed initial claims for state unemployment benefits rose 3,000 to a seasonally adjusted 250,000 for the week ended December 30.

“Higher jobless claims are not signalling a slowdown in the economy, that’s for sure,” said Chris Rupkey, chief economist at MUFG in New York. “The labour market looks strong and the outlook for 2018 is even better.”

A Labour Department report, due on Friday, is expected to show that nonfarm payrolls rose by 190,000 jobs in December, according to separate polls by Bloomberg and Reuters. 

Wall Street lifted. In 12.55pm trading in New York, the Dow Jones Industrial Average climbed 0.6 percent, while the Nasdaq Composite Index added 0.2 percent. In 12.40pm trading, the Standard & Poor’s 500 Index rose 0.4 percent. 

"You saw some very positive numbers coming out of the US payrolls, which continues to show this economic growth story," Francis Gannon, co-chief investment officer at Royce Funds, told Bloomberg. “That’s what the market is running on.”

“It’s this idea that the economy is doing better than people think, and then you’ve got the tax reform on top of it, which is kind of adding fuel to the fire,” according to Gannon. 

The Dow rose to a record high of 25,105.96, while the S&P 500 climbed to a record of 2,729.29 and the Nasdaq climbed to a  a record of 7,098.05.

“Every 1,000-point increment in the Dow is becoming less of a percent move. It’s just another milestone,” Michael Antonelli, managing director, institutional sales trading at Robert W Baird in Milwaukee, told Reuters.

“The point that people need to take is that the macro indicators are telling investors that world economies are doing really well,” Antonelli noted. 

The Dow advanced as gains in shares of DowDuPont and those of IBM, recently up 2.1 percent and 2 percent respectively, outweighed declines in shares of Intel and those of Chevron, down 2.6 percent and 0.7 percent recently respectively.

Commodity prices also moved higher, sending the Bloomberg Commodities Spot Index to the highest level in more than three years. 

"Rarely has the outlook for a New Year been as encouraging as it is today," Holger Schmieding, chief economist at Berenberg Bank in London, told Bloomberg. 

In Europe, the Stoxx 600 Index finished the day with a 0.9 percent advance from the previous close. France’s CAC40 Index rallied 1.6 percent, while Germany’s DAX Index jumped 1.5 percent, and the UK’s FTSE 100 index rose 0.3 percent. 


  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

MARKET CLOSE: NZ shares rise after bumpy week, led by NZ Refining, Synlait while Port of Tauranga, A2 drop
NZ dollar heads for 0.7% weekly decline as trade jitters weigh on markets
Mining industry says no more projects the size of Te Kuha, but smaller ones waiting
Goodman Fielder seeks ComCom permission to buy Yoplait rights in NZ
RBNZ's Orr tipped to stand pat and could signal hikes might take even longer
Consistency across port reporting would boost transparency, deputy Auditor-General says
Fletcher's Ross says no change to B+I provisions, won't comment on delays in Chch airport hotel
SeaDragon auditor PwC struggles to find evidence supporting asset valuations; withholds opinion
Education Ministry's leaky school claim against Carter Holt about a year away
NZ may produce record volumes of milk this season, Rabobank says

IRG See IRG research reports