Trump rally Day 2: Dow hits record high; Nasdaq slides
The Dow surged 218 points and blasted to a new closing high, marking Day 2 of the "Trump Bounce" as Wall Street fears related to Donald Trump’s stunning election win gave way to hopes that the president-elect's policies could boost the economy.
But the Trump rally was not broad-based, as sectors that the candidate unleashed attacks on — technology companies, Obamacare, emerging markets, took a hit.
The Dow Jones industrial average climbed 1.2% to its new all-time closing high of 18,807.88, setting a new intraday high of 18,873.66 in the process. Its previous record close was 18,636.05, notched in mid-August. The Dow jumped 256.95 points Wednesday to 18,589.69.
The broad Standard & Poor's 500 stock index inched up 0.2% as it moved closer to its record close of 2190.15. But tech stocks tumbled as the Nasdaq composite slid 0.8%.
The post-election rally has been driven by investors reassessing their views on a Trump presidency and beginning to focus on the growth-friendly positives for the economy, such as fiscal spending, lower taxes and less regulation of businesses under Trump.
In general, Wall Street is shifting its focus from Trump, the man and presidential campaigner, to Trump's policies.
Trump gets his chance to be 'greatest jobs president'
Wall Street also is betting that Trump's growth-friendly policies have a better chance of getting enacted with Republicans controlling Congress, adds David Rosenberg, chief strategist at Gluskin Sheff.
"The rally could represent investors taking a breath and looking at these potential positives in terms of seeing government actually move economic policy forward," Rosenberg told clients in a report.
The sell-off in bonds continued Thursday, sending bond prices lower and kicking up the yield on the 10-year Treasury note to 2.10% from 2.06% late Wednesday.
Japan’s Nikkei 225 index surged 6.7% to finish at 17,344.42, while Hong Kong’s Hang Seng index rose 1.9%. The Shanghai composite index added 1.4% to close at 3,171.28.
Major European stock markets gave up early gains and were lower as Germany's DAX index was down 0.2% and France's CAC 40 dropped 0.3%.
Stocks jumped on Wall Street on Wednesday as the major indexes pared steep losses after volatile trading overnight ahead of Trump’s victory. Trump’s pledge to unify a deeply divided nation in his victory speech early Wednesday helped calm jitters in global financial markets.
Street processes Trump win; Dow 46 from record close
“The stunning turn in sentiment suggests there is now a consensus building that much of the policy announced during the campaign was a sales pitch rather than a commitment to act,” said Michael McCarthy, chief strategist at CMC Markets.
“Investors ignored the potential for damage to international trade and growth prospects and focused on Republican control of both houses of Congress as well as the White House. This offers the prospect of reform that could stimulate the U.S. economy,” he added.
Investors hope Trump's plans for infrastructure spending, tax cuts and lighter regulation will benefit the U.S. economy. They had worried because his campaign promises carried few policy details.
Contributing: Associated Press