Wall Street gets 2020 off to a solid start with more records
(AP) – Stocks got the New Year off to a roaring start Thursday with more solid gains and record highs for major U.S. indexes, following up on a strong finish to 2019.
The Dow Jones Industrial Average climbed more than 300 points, as shares in Walt Disney, Boeing, Apple and other big companies rose. Technology sector stocks accounted for a good part of the upward move. Smaller-company stocks lagged the broader market’s gains.
The market has been grinding higher for weeks, pushing indexes to record highs, as concerns about the strength of the economy and the possibility of further escalation in the U.S.-China trade war have eased. Three interest rate cuts by the Federal Reserve and signals that the central bank is in no hurry to raise rates this year have also helped steady markets after a summer slump.
“At this point, the momentum we saw in December is carrying into January,” said Willie Delwiche, investment strategist at Baird. “It might take a little bit to really figure out whether the optimism expressed in U.S. stocks all of last year is warranted with respect to fundamentals, but for now, the benefit of the doubt is with the bulls.”
The S&P 500 climbed 27.07 points, or 0.8%, to 3,257.85. The Dow rose 330.36 points, or 1.2%, to 28,868.80. The Nasdaq composite gained 119.58 points, or 1.3%, to 9,092.19. All three indexes notched new record highs.
Smaller company stocks didn’t fare nearly as well. The Russell 2000 index slid 1.70 points, or 0.1%, to 1,666.77.
The latest gains follow a blockbuster performance by the market in 2019. The S&P 500 and Nasdaq closed out the year Tuesday with their best annual performance since 2013.
Bond prices rose. The yield on the 10-year Treasury fell to 1.88% from 1.91% late Tuesday.
U.S. stocks headed higher from the get-go Thursday as markets reopened following the New Year’s Day holiday. The market got a boost following a rally overseas after China’s central bank said it will free up more money for lending.
China’s central bank said it will cut the amount of money banks will be required to have on hand from Jan. 6. The move is expected to boost the country’s slowing economy ahead of the Lunar New Year, which falls on Jan. 25.
“China’s cutting is a reminder that central banks are providing liquidity,” Delwiche said.
Investors continued to wait for Washington and Beijing to formalize an initial trade deal that has helped ease the market’s jitters over the 18-month dispute between the world’s two biggest economies.
Washington and Beijing announced last month that they reached an agreement over a “Phase 1” trade pact that calls for the U.S. to reduce tariffs and China to buy larger quantities of U.S. farm products.
Earlier this week, President Donald Trump tweeted that he will sign the initial trade deal with China at the White House this month. He also said he plans to travel to Beijing at a later date to open talks on other sticking points in the dispute that remain to be worked out, including Chinese practices the U.S. complains unfairly favor its own companies.
Technology companies accounted for a big slice of the market’s upward move Thursday. Apple rose 2.3%, while Advanced Micro Devices jumped 7.1%.
Communication services and industrial stocks also notched solid gains. Facebook added 2.2% and Boeing rose 2.3%. General Electric climbed 6.9%.
Retailers and restaurant chains helped lift the market. Amazon gained 2.7% and McDonald’s rose 1.6%.
Goldman Sachs Group was among the big gainers in the financial sector, climbing 1.9%.
Utilities, real estate and materials stocks fell as traders shifted money away from the safe-play sectors.
Tesla rose 2.9% after a published report suggested the electric car maker will deliver its first China made Model 3 sedans as early as next week.
Anixter International climbed 3.9% after the supplier of communication and security products agreed to a higher buyout offer from private equity firm Clayton, Dubilier and Rice.
Energy futures bounced back from an early slide to close mostly higher.
Benchmark crude oil rose 12 cents to settle at $61.18 a barrel. Brent crude oil, the international standard, gained 25 cents to close at $66.25 a barrel.
Wholesale gasoline rose 1 cent to $1.70 per gallon. Heating oil was little changed at $2.02 per gallon. Natural gas fell 7 cents to $2.12 per 1,000 cubic feet.
Gold rose $5.00 to $1,524.50 per ounce, silver rose 14 cents to $17.97 per ounce and copper rose 4 cents to $2.83 per pound.
The dollar fell to 108.55 Japanese yen from 108.72 yen on Wednesday. The euro weakened to $1.1166 from $1.1262.
Major indexes in Europe closed broadly higher. Germany’s DAX rose 1%, while France’s CAC 40 gained 1.1%. Britain’s FTSE 100 added 0.8%. In Asia, Hong Kong’s Hang Seng jumped 1.1% and South Korea’s Kospi lost 1.0%. Tokyo’s market was closed for the New Year’s Day holiday.