Stocks jump as S&P 500, Nasdaq hit new record highs
Stocks jumped Tuesday as the S&P 500 and Nasdaq hit new all-time highs and the Dow moved back up toward the 20,000 level.
The Dow Jones industrial average gained 113 points, or 0.6%, to 19,912.71. The Standard & Poor's 500 index climbed 0.7% to an all-time closing high of 2280.07. The tech-heavy Nasdaq composite index rose 0.9% to set a new closing record of 5600.96.
Materials and financial companies led the stock indexes higher in afternoon trading as investors sized up the latest round of company earnings news. Energy stocks also rose as crude oil prices headed higher. Health care, phone companies and other high-dividend stocks were among the biggest laggards as bond yields rose.
The heads of General Motors, Ford Motor and Fiat Chrysler Automobiles met with President Donald Trump early Tuesday. Trump wants the automakers to build new factories in the U.S. He’s warned of a “substantial border tax” on companies that move manufacturing out of the country and promised tax advantages to those that produce domestically. GM (GM) shares gained 1%, Ford (F) added 2.4% and Fiat Chrysler (FCAU) jumped 5.9%.
“They used to call some of this jawboning,” said David Winters, CEO of Wintergreen Advisers. “So, far President Trump has been encouraging companies to do what’s in his vision of a successful America. There’s a lot of enthusiasm, but it’s really going to be what happens in the next couple of months in terms of legislation so there’s clarity.”
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Trump’s latest moves on trade and regulations have raised concerns over future access to the U.S. market, particularly among Asian countries. Trump signed a memorandum saying the U.S. will withdraw from the trade pact known as the Trans-Pacific Partnership. He also said he would renegotiate the North American Free Trade Agreement.
“The lack of any key U.S. economic data overnight had dealers focused exclusively on the Trump administration’s trade policy and the signing of the executive order to pull out of the TPP,” said Stephen Innes, senior trader at Oanda, of the Trans-Pacific Partnership.
Benchmark U.S. crude rose 43 cents, or 0.8%, to $53.18 a barrel in New York. Brent crude, used to price international oils, gained 21 cents, or 0.4 %, at $55.44 a barrel in London.
The 10-year Treasury yield jumped to 2.47% from 2.40% late Monday.
Among earnings news:
• Johnson & Johnson (JNJ) slid 1.9% after the company reported fourth-quarter results that edged Wall Street’s forecasts, but also issued a 2017 forecast that fell below what analysts were expecting. The maker of Band-Aids, medical devices and prescription drugs also said it would start seeking a possible sale, joint venture or operating partnerships for its diabetes care businesses.
• Verizon (VZ) slumped 4.4% after the phone and communications company served up earnings for the last three months of 2016 that fell short of what analysts were expecting. The company, whose deal to buy Yahoo’s internet operations may be in jeopardy, also said that its roster of retail postpaid subscribers fell sharply.
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• Several homebuilders were trading higher. D.R. Horton (DHI) climbed 6.7% after the homebuilder delivered higher earnings as home closings and net home orders increased. Lennar (LEN) surged 6% and PulteGroup (PHM) gained 5.9%.
• Kimberly-Clark (KMB), which makes Kleenex and other paper products, rose 4.1% after reporting earnings that beat analysts’ forecasts.
In Europe, Germany’s DAX inched up 0.4% and France’s CAC 40 gained 0.2%. Britain’s FTSE 100 was flat after the Supreme Court said parliament would have a right to vote on whether Britain formally exits the European Union. The ruling doesn’t mean Britain will remain in the EU, but it could delay the process.
In Asia, Japan’s benchmark Nikkei 225 slipped 0.6% to finish at 18,787.99. South Korea’s Kospi was little changed. Hong Kong’s Hang Seng gained 0.2% to 22,936.63, while the Shanghai Composite ticked up 0.2% to 3,142.55.