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America’s Markets

Stocks rise as Dow approaches 20,000 ... again

Yuri Kageyama
Associated Press

Stocks climbed Wednesday as Wall Street posted a second straight day of gains in the new year and the Dow once again approached the 20,000 milestone.

The Dow Jones industrial average ended up 60 points, or 0.3%, to 19,942.16. The blue-chip index rose has come close to topping 20,000 several times in recent weeks but each time it gets near has pulled back. The Standard & Poor's 500 index rose 0.6% and the Nasdaq composite index gained 0.9%. Both the S&P 500 and Nasdaq are near their record closing highs.

Gordon Charlop, left, works with fellow traders on the floor of the New York Stock Exchange, Tuesday, Jan. 3, 2017.  (AP Photo/Richard Drew))

Stocks maintained their gains following the release of the minutes from the latest Federal Reserve meeting that provided clues to why policymakers raised interest rates in December for only the second time since 2006 and forecast three rate hikes in 2017 instead of the two moves previously anticipated.

Fed officials said they might have to raise interest rates faster than anticipated to prevent rapidly falling unemployment and President-elect Donald Trump’s proposed fiscal stimulus from fueling excessive inflation, according to minutes of the Fed’s December 13-14 meeting.

Fed: Low unemployment, Trump fiscal stimulus could speed rate hikes

Benchmark U.S. crude was up 1.8% to $53.24 a barrel in New York. It lost $1.39 on Tuesday.

Some of the largest gains are going to consumer-focused companies. Automakers are jumping as car companies report their December sales, and vehicle suppliers are also trading higher. Retailers are rising as the market builds on its gains from the day before.

General Motors (GM) said its total sales climbed 10% from a year ago as Chevy sales increased, and its stock rose more than 5% and Ford (F) climbed 4.5%. Electric car maker Tesla Motors (TSLA), which gave its own report late Tuesday, picked up 4.3%.

Auto sales strong as industry nears record high for 2016

Retailers also rose. Gap (GPS) was up 3.4% and office supply company Staples (SPLS) gained 2.5%.

Global stocks were mixed. In Europe, France's CAC 40 and Germany's DAX were flat. Britain's FTSE 100 was up 0.2%.

In the eurozone, inflation rose to a three-year high, mainly due to higher energy costs. A survey of business activity also showed growth picking up at the end of 2016. The reports were positive on the whole for a region that has seen low inflation and stagnant growth.

"Strong sentiment at the start of the year coupled with volatility could be what 2017 has in store for the markets," said Jingyi Pan, a market strategist at IG in Singapore.

Asian stocks were mostly higher as investors were encouraged by Wednesday's release of the Nikkei Japan Manufacturing PMI, a survey of purchasing managers. The reading of 52.4 for December was its highest in a year. The figure is based on a scale of 0 to 100, where 50 marks the cutoff between contraction and expansion.

The Tokyo Stock Exchange welcomed the new year in customary style as women in kimono clapped while Finance Minister Taro Aso rang a bell to celebrate this year's first session. The Nikkei surged nearly 500 points, as the weak yen, a boon for exporters, pushed auto shares including Honda Motor higher.

Japan's benchmark Nikkei 225 added 2.5% to close at 19,594.16, while Australia's S&P/ASX 200 rose 0.1% to 5,736.40. South Korea's Kospi gained nearly 0.1% to 2,045.64. Hong Kong's Hang Seng dipped 0.1% to 22,134.47, while the Shanghai Composite index gained 0.7% to 3,158.79.

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