The Dow came within one point of 20,000 for the first time ever on Friday and the Nasdaq and S&P 500 reached record highs, boosted by Apple, extending a two-month rally on optimism about President-elect Donald Trump’s big-spender plans for the world’s largest economy.
Apple climbed 1.1 per cent after Canada’s Competition Bureau did not find sufficient evidence the iPhone maker had engaged in anti-competitive conduct, closing a two-year investigation into the company.
Wall Street has been on a tear since Trump won the US election in November, with the Dow up 9 per cent as investors bet he will stimulate the economy with lower taxes and infrastructure spending.
While Friday’s gains suggested the rally was not yet over, some investors have grown cautious.
“The market’s advance is understandable because of the economic stimulus optimism associated with a new Trump presidency,” said CFRA chief investment strategist Sam Stovall.
“But parabolic market advances traditionally experience digestion of these gains, and I don’t think this time will be any different.” Jobs data
The record trading session followed a US Labor Department report that showed the economy added fewer-than-expected jobs last month but wages increased, suggesting resilience in the labour market.
Mohamed El-Erian, Allianz’s chief economic advisor, said the jobs report will encourage the Fed to proceed with raising interest rates, though he cautioned that a strong US dollar could weigh on growth.
Stocks did not react significantly to a report that five people were dead in a shooting at Florida’s Fort Lauderdale airport.
The Dow Jones Industrial Average rose 64.51 points, or 0.32 per cent, to end at 19,963.8 points. The index rose as high as 19,999.63 but lost ground.
Wall Street giant Goldman Sachs rose 1.48 per cent, helping the Dow more than any other stock.
The S&P 500 gained 7.98 points, or 0.35 per cent, to 2276.98, its highest close ever. The Nasdaq Composite added 33.12 points, or 0.6 per cent, to 5521.06, also a record.
Nine of the 11 major S&P 500 industry sectors rose, led by technology’s 0.96 per cent gain.
The MSCI All-Country World Index slipped 0.1 per cent to pare a weekly gain to 1.7 per cent.
The Stoxx Europe 600 Index fell 0.1 per cent, trimming a weekly advance, as commodity producers declined.
In New York, BHP Billiton fell 1.1 per cent, Rio Tinto tumbled 2.4 per cent Bonds, dollar
In the bond market, the yield on the 10-year Treasury note jumped after falling nine basis points on Thursday.
Oil slipped and gold retreated from a four-week high.
ASX futures rose 9 points or 0.2 per cent, to 5730. The Australian dollar slid 0.5 per cent to US73.01¢, briefly dipping into US72¢ territory.
Evidence of a healthy US labour market helped the greenback recoup some losses as investors speculated growth in the world’s largest economy is poised to accelerate.
Mohamed El-Erian said the jobs report will encourage the Fed to proceed with raising interest rates, though he cautioned that a strong US dollar could weigh on growth. Commodities
The spot price of iron ore dropped $US2.68 or 3.4 per cent, to $US76.25 a tonne, according to Metal Bulletin.
“Chinese mills are only buying materials on an as-needed basis from the ports, where prices have stayed rangebound this week,” Metal Bulletin reported. “Both enquiries and transactions were scarce in the seaborne market.”
Crude was little changed at $US53.74 a barrel in New York. US government data showed strong job and wage gains while Kuwait and Saudi Arabia signalled they are curbing output.
Gold futures fell 0.8 per cent to $US1172.50 an ounce.
Copper slipped 0.6 per cent and natural gas futures slid 0.7 per cent. Can the rally continue?
The strength of fourth-quarter earnings reports from US companies over the next few weeks will be closely watched by investors eyeing high stock valuations.
Following its recent gains, the S&P 500 is trading at about 17 times expected earnings, which is pricey compared to its 10-year average of 14, according to Thomson Reuters Datastream.
Analysts on average expect fourth-quarter earnings to rise 6.1 per cent compared to a year before, when slumping oil prices crippled energy companies.
The S&P 500 posted 24 new 52-week highs and no new lows; the Nasdaq Composite recorded 76 new highs and 15 new lows.
About 6.4 billion shares changed hands in US exchanges, a bit under the 6.7 billion daily average over the last 20 sessions.
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