Dow tops 19,000 as U.S. stocks extend post-election advance

(Bloomberg) -- The Dow climbed above 19,000 for the first time, as U.S. stocks added to gains that pushed four major equity benchmarks to simultaneous records for the first time since 1999.

The Dow rose 45.44 points to 19,002.13 at 9:31 a.m. in New York, pushing its advance since Nov. 8 to 3.6%. The S&P 500 rose 0.2% to 2,202.23. Energy and commodity producers led the rally in equities on Monday, adding to a post-election advance spurred by speculation the new government’s economic policies will boost growth.

The new milestone for the S&P 500 pushed the index to an annual gain of 7.6%, a recovery for a gauge that started the year down as much as 11%. Donald Trump’s presidential win has fueled optimism that his pledge to cut taxes and increase fiscal spending will benefit industries more geared to the economic cycle. The fresh equity records also came as American companies ended a five-quarter profit slump.

S&P 500 stocks strapped with the most net debt dropped 5% this year.
Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Friday, Sept. 30, 2016. U.S. stocks advanced as Deutsche Bank AG erased losses in German trading and European shares pared declines, easing concerns that turmoil in the banking industry could spread. Photographer: Michael Nagle/Bloomberg

“The market is a lot more sure of itself now,” said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank in Bonn, Germany. He predicts the S&P 500 will rise another 9.2% by the end of 2017. “Stocks are no longer stuck in that frustrating range and we’ve finally broken through to new records. We can move on to pricing in the improving outlook. There are strong signs that the U.S. economy is in good shape and that bodes well for corporate earnings.”

Traders have also boosted bets for tighter monetary policy since the vote, on speculation Trump’s policies will lead to higher inflation. After Federal Reserve Chairwoman Janet Yellen acknowledged last week the strength in the economy, saying that the central bank is close to raising rates, traders are now pricing in a 100% chance of a move in December.

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