While you were sleeping: Wall Street hits records

Tuesday 22nd November 2016

Wall Street rose to record highs amid bets that potential tax cuts and government spending under US President-elect Donald Trump will accelerate economic growth and corporate profits.

In 12.50pm trading in New York, the Dow Jones Industrial Average added 0.4 percent, while the Nasdaq Composite Index gained 0.8 percent. In 12.36pm trading, the Standard & Poor’s 500 Index increased 0.6 percent.

“It’s a push on the upper end of the equity markets due to this renewed belief that there’s tax cuts and stimulus spending coming in 2017 and 2018,” Chad Morganlander, a money manager at Stifel, Nicolaus & Co in Florham Park, New Jersey, told Bloomberg. “The overall equity markets are taking a cue from that and they are trading on the belief that earnings will move higher as well as revenues in 2017.”

The Dow touched a record high 18,947.44, while the S&P 500 rose to a record 2,197.16 and the Nasdaq hit a record 5,364.76.

Some were more cautious.

"I think the (post-election rally) is continuing today but the volumes are very low,” Phil Davis, chief executive of PSW Investments, told Reuters.

US markets are closed on Thursday for the Thanksgiving holiday.

The Dow moved higher, led by gains in shares of Apple and those of Exxon Mobil, up 1.4 percent and 1.27 percent respectively. Bucking the trend were shares of 3M and those of McDonald’s, down 1 percent and 0.8 percent respectively.

Shares of Chevron also gained, last up 1.4 percent, with oil prices amid optimism OPEC will finalise details of an agreement to curb production. Oil rose more than 4 percent in New York.

“When you’ve got all of the major players on board with a production cut, obviously you're very close to getting a deal done," Phil Flynn, senior market analyst at Price Futures Group in Chicago, told Reuters. “You never know with OPEC—sometimes they go to the last minute and there are a lot of false starts.”

Shares of Tyson Foods sank after the meat producer reported quarterly profit and earnings that fell short of expectations, offered a disappointing outlook and announced the departure of Chief Executive Donnie Smith at the end of the year.

The stock traded 14.6 percent weaker as of 11.17am in New York.

Tom Hayes, President of Tyson Foods, will succeed Smith as Chief Executive Officer on December 31. Smith, who has been CEO of Tyson Foods since November 2009, will be available to consult with the company for a three-year period, the company said.

In the latest corporate deals, shares of LifeLock jumped, up 15.2 percent as of 1.13pm in New York, after Symantec said it agreed to buy the identity theft protection company for US$2.3 billion.

In Europe, the Stoxx 600 Index ended the session with a 0.3 percent increase from the previous close. The UK’s FTSE 100 Index eked out a 0.03 percent gain, Germany’s DAX Index rose 0.2 percent, while France’s CAC 40 Index climbed 0.6 percent.

BusinessDesk.co.nz

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