While you were sleeping: Record rally continues

Wednesday 21st December 2016

Wall Street climbed to fresh records, amid the momentum of optimistic sentiment about the outlook for US economic growth and corporate profits.

In 1.04pm trading in New York, the Dow Jones Industrial Average increased 0.4 percent, as did the Nasdaq Composite Index. In 12.49pm trading, the Standard & Poor’s 500 Index added 0.3 percent.

The Dow touched a record-high 19,987.63 while the Nasdaq hit a record 5,489.47.

In the Dow, advances in shares of Caterpillar and those of Nike recently trading 1.7 percent and 1.4 percent higher respectively, outweighed slides in shares of Merck and those of Cisco, down 0.9 percent and 0.5 percent respectively.

Wall Street has steadily climbed since the election victory of Donald Trump prompted bets that the US President-elect will boost spending and ease regulation.

“It's just the momentum since the election," Jeff Zipper, managing director for investments at Private Client Reserve at US Bank in Palm Beach, Florida, told Reuters. “The market is focused on the Trump agenda, which is tax cuts, infrastructure spending and deregulation. There's not a lot of selling going on.”

Shares of Nvidia rallied, up 3.8 percent as of 1.02pm in New York, after brokerages Goldman Sachs and Mizuho lifted their price targets on the stock, according to media reports.

"We continue to view [Nvidia] as a unique growth story in semis, levered to positive secular trends in gaming, VR [virtual reality], AI [artificial intelligence]/ML [machine learning] and automotive," analyst Toshiya Hari wrote in a note to clients Tuesday, CNBC reported.

Meanwhile, shares of General Mills dropped after the maker of Cheerio breakfast cereal and Yoplait yoghurt posted weaker-than-expected profit and sales in its second quarter.

The Minneapolis-based company said it now expects organic net sales, which exclude excluding acquisitions and divestitures, to decline between 3 and 4 percent in its fiscal 2017, downgraded from the previous estimate for “flat” to down 2 percent.

"Although we posted disappointing net sales performance in the second quarter, we delivered good growth in adjusted diluted EPS, driven by significant expansion in our adjusted operating profit margin," General Mills Chief Executive Officer Ken Powell said in a statement. "Our organic sales declines reflect the actions we've taken to optimise our spending and prioritise profitable volume, as well as weakening food-industry trends in the US.”

The stock traded 3.3 percent weaker as of 12.36pm in New York.

In Europe, the Stoxx 600 Index finished the day with a 0.5 percent increase from the previous close. Germany’s DAX Index rose 0.3 percent, the UK’s FTSE 100 Index gained 0.4 percent, while France’s CAC 40 Index climbed 0.6 percent.

BusinessDesk.co.nz

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