Dow hits 20000 for the first time as stocks’ postelection rally continues – Los Angeles Times
The Dow Jones industrial average reached 20,000 points for the first time in history Wednesday as the stock market extended its rally in response to the election of President Trump and prospects for higher corporate profits.
Shortly before 9 a.m. PST, the famed average of 30 blue-chip stocks stood at 20,044.41, up 0.7% on the day. Earlier in the morning, it was as high as 20,082.00.
The Standard & Poor’s 500 index and the Nasdaq composite, broader gauges of the market, also were trading at or near record highs. The S&P 500 was at 2,292.57, up 0.6%, and the Nasdaq was at 5,638.47, up 0.7%.
It appeared the Dow would eclipse 20,000 points last month — the closing high of 19,974.62 was set Dec. 20 — but the market then moved largely sideways for the next four weeks before resuming its advance.
That extended a months-long rally — and a bull market in stocks stretching back several years — that’s recently been propelled by Trump’s promises of business-friendly policies and Wall Street’s growing expectation of higher corporate earnings in the months to come.
It’s been a rally few saw coming because it looked so implausible a year ago when stock prices fell sharply in response to a financial crisis in China, low oil prices, uncertainty about where interest rates were headed and other factors.
But after rebounding from those concerns, stocks climbed steadily and then gained added momentum after the Nov. 8 election of Trump, who has called for corporate tax cuts, less regulation, more infrastructure building and a tougher U.S. stance on trade.
The Dow finished 2016 with a gain of 13.4%, while the S&P 500 rose 9.5% for the year and the Nasdaq composite gained 7.5%.
The Dow closed at 19,000 only two months ago, on Nov. 22. It has taken nearly 18 years for the average to nearly double from 10,000, which it reached in late March 1999.
In Wednesday’s trading, the Dow industrials were led by Boeing Co., which jumped 4.4%. Caterpillar Inc., the maker of earth-moving equipment, rose 1.7% in response to Trump’s pledge to beef up U.S. infrastructure spending.
During a White House meeting with top executives of major automakers Tuesday, Trump reiterated that “we’re reducing [corporate] taxes very substantially, and we’re reducing unnecessary regulations,” all of which augurs well for corporate profits and thus is helping provide a tailwind for stock prices.
Trump also has vowed to improve U.S. trade, and Monday he formally pulled the United States out of the Trans-Pacific Partnership, a 12-nation trade agreement negotiated by the Obama administration that Trump long has called detrimental to U.S. economic interests.
Trump benefited from arriving at the White House with the U.S. and global economies already showing improvement, and his pro-business agenda has added to investors’ bullishness, said Jim Paulsen, chief investment strategist at Wells Capital Management.
“There’s been a lot of good stuff going on, including a re-acceleration of U.S. growth,” Paulsen said Tuesday on CNBC.
After the Dow opened above 20,000 points Wednesday, Trump tweeted simply: “Great!”
And on the floor of the New York Stock Exchange, some traders celebrated by wearing baseball caps emblazoned with “Dow 20,000.”
Although the Dow’s milestone stood out, a broad array of stocks already have moved substantially higher this year.
For instance, the Nasdaq composite index — which is laden with technology shares — is up nearly 5% this month. The Russell 1000 index, which includes many small-capitalization companies, has gained 2.6%.
Other individual standouts in midsession trading Wednesday included Seagate Technology, which soared 20% to $44.94 a share after the Cupertino, Calif., data-storage company reported strong fiscal second-quarter results late Tuesday.
9:05 a.m.: This article was updated with Seagate shares’ jump and other stocks’ movements, a comment from President Trump and additional background information.
7:50 a.m.: This article was updated with levels of the major stock indexes, information about the Trump administration’s recent moves and an analyst comment.
This article was originally published at 6:30 a.m.