Dow, Russell Extend Rallies as Economic Data Lifts Industrials

  • Russell 2000 winning streak at 14 days, Dow at record
  • Bank advance persists as FOMC minutes signal hike nearing

The Dow Jones Industrial Average added to its all-time high and the Russell 2000 Index extended a rally to 14 days as data fueled speculation that the world’s largest economy can withstand higher rates that the Federal Reserve has signaled may be imminent.

Industrial stocks rose the most, with Caterpillar Inc. and United Technologies Corp. adding more than 1 percent on the durable goods data. American Express Co. led advances among financial shares as as the yield on 10-year Treasury notes surged. REITs, utilities and phone shares have struggled in the latest rally as the need for their high dividend yields has waned as bonds plunge. Microsoft Corp. slid 1.2 percent to weigh on technology shares.

The S&P 500 Index rose 0.1 percent to a record 2,204.61 at 4 p.m. in New York. The Dow rose past 19,080, adding to an all-time high. The Russell 2000 Index of small caps climbed 0.5 percent to the most ever. It’s up 16 percent during its longest winning streak since 1996.

Stock benchmarks have advanced on speculation Donald Trump’s pledges to cut taxes and increase fiscal spending will boost companies that benefit from economic growth. The fresh equity records also came as American companies ended a five-quarter decline in profits. U.S. markets will be closed on Thursday for the Thanksgiving holiday.

“The market is quite bullish at the moment but we run into a holiday, so I think people will probably take some chips off the table,” said Christian Zogg, head of equity and fixed income at LLB Asset Management in Vaduz, Liechtenstein. “The market is basically waiting for some concrete measures on the tax side and fiscal spending. So far, there is not much concrete to calculate, so I think today will be rather quiet.”

Traders are pricing in a 100 percent chance that the Fed will raise interest rates next month, compared with a 68 percent probability at the start of November. Fed officials saw a strengthening case to raise interest rates as the labor market tightened, with some saying a hike should happen in December, according to minutes of their November gathering released Wednesday in Washington.

The S&P 500 has rallied 3 percent since the U.S. presidential election and is headed for its first monthly increase since July, led by commodity producers and financial companies.

Among shares active, Deere & Co. jumped after the agricultural-equipment maker posted quarterly net income that was more than double the average analyst estimate. Peers CNH Industrial NV climbed.

Eli Lilly & Co. tumbled after its Alzheimer’s drug failed to slow the progress of the disease in a final-stage trial. Biogen Inc. slid 8.8 percent.

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