Dow breaks above 19,000, S&P jumps over 2,200 as stocks hit record highs

U.S. equities opened higher on Tuesday, hitting new all-time highs, as investors awaited housing data and kept an eye on President-elect Donald Trump’s policy agenda.

The Dow Jones industrial average broke above 19,000 for the first time ever shortly after the open, with Boeing contributing the most gains. The S&P 500 traded over 2,200 for the first time, as real estate and energy led advancers. The Nasdaq composite rose 0.3 percent, also trading at fresh record highs.

“Global equity markets are reacting positively to new all-time highs in the SPX,” said Katie Stockton, chief technical strategist at BTIG, in a note. “Momentum is proving strong enough to overrule overbought conditions, so we think it is appropriate to be buying breakouts.”

The three major indexes closed at record levels on Wednesday, along with the small-caps Russell 2000, which continues to outperform the Dow, S&P and Nasdaq since Nov. 8.

But “don’t forget, we spend about three months consolidating before this breakout after the election,” said Bruce Bittles, chief investment strategist at Baird. “From a time standpoint, this may be just the beginning.”

“We are in a transition period on a number of fronts. First, we’re moving from an interest-rate driven market into an earnings-driven market,” he said. “Also, something most people are missing, is we’re getting a more business-friendly administration.”

The Federal Reserve has indicated numerous times its desire to normalize monetary policy, and it’s all but certain the central bank will take a step in that direction next month. According to the CME Group’s FedWatch tool, market expectations for an interest rate hike in December were more than 100 percent.

A trader wears a hat that reads 'DOW 19,000' on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Nov. 21, 2016.

Michael Nagle | Bloomberg | Getty Images
A trader wears a hat that reads ‘DOW 19,000’ on the floor of the New York Stock Exchange (NYSE) in New York, U.S., on Monday, Nov. 21, 2016.

Meanwhile, S&P 500 earnings grew for the first time in more than a year. According to data compiled by The Earnings Scout, earnings per share had grown 6.21 percent as of Tuesday at 8:30 a.m. ET.

Stocks have also been bolstered by Trump’s surprising win over Democrat Hillary Clinton, as expectations for deregulation in a number of sectors and tax cuts have increased optimism in the U.S. stock market.

On Monday, Trump expanded on his policy agenda, which includes withdrawing from the Trans-Pacific Partnership (TPP). The trade pact was a centerpiece of the Obama administration’s “pivot” towards Asia and was meant to solidify the U.S.’s presence in what is considered by many American companies as the most economically dynamic part in the world.

In economic news, existing home sales data for October are due at 10 a.m. There are no other major data due Tuesday, but Wednesday will see several reports released, as the U.S. will celebrate the Thanksgiving holiday on Thursday.

“The commuter trains should start thinning out by this afternoon as traders take advantage of the Thanksgiving holiday. The price action for the next several days should therefore put investors to sleep which will preclude the reprise of any deleterious amount of volatility,” Jeremy Klein, chief market strategist at FBN Securities, said in a note.

In corporate news, medical equipment maker Medtronic reported mixed quarterly results. Medtronic also cut its full-year forecast, as customers delay purchases ahead of new products entering the marketplace.

Meanwhile, KKR is buying Japanese auto parts maker Calsonic from Nissan Motors and its partners for $4.5 billion.

DJIA Dow Industrials 18997.24
40.55 0.21%
S&P 500 S&P 500 Index 2201.80
3.62 0.16%
NASDAQ NASDAQ Composite 5382.42
13.56 0.25%

—CNBC’s Peter Schacknow and Reuters contributed to this report.

On tap this week:


10:00 a.m. Existing home sales


8:30 a.m. Durable goods

8:30 a.m. Jobless claims

9:00 a.m. FHFA home prices

9:45 a.m. Markit Manufacturing PMI

10:00 a.m. New home sales

10:00 a.m. Consumer sentiment

2:00 p.m. Fed minutes


Thanksgiving holiday

US markets closed


8:30 a.m. Trade deficit

9:45 a.m. Markit Services PMI

This entry was posted in Markets. Bookmark the permalink.

Leave a Reply