Dow Holds Onto 20K, But Markets Remain Uncertain

Dow Holds Onto 20K, But Markets Remain Uncertain

The rally in US stocks stalled Thursday as investors sorted through a raft of corporate results that delivered a mixed picture on the state of the American economy. Mexico’s peso slumped as the showdown over a border wall plan intensified, while Treasuries erased losses. But the Dow held on tenaciously, eclipsing 20K for a 2nd day after breaking the psychological barrier yesterday for the very first time.

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The S&P 500 Index fluctuated near an all-time high, rising from session lows in afternoon trading. Caterpillar Inc. slumped while EBay Inc. rallied after reporting results. The peso extended declines after Mexico’s president canceled a meeting with Donald Trump. The dollar strengthened against most major peers while oil climbed above $53 a barrel. Treasuries rose following a strong auction of seven-year notes. Gold slumped below $1,200 an ounce.

At today's close the Dow Jones Industrial Average was up 0.16%, or 32.4 points to 20,100.91, while the S&P 500 was down 1.16 points, or .0.07% to 2,296.68 . The Nasdaq was down 0.02% or 0.16 points to ​5,655.18

The bullish tone on financial markets eased today as the US-Mexico tension threatened one of the world’s largest bilateral trading relationships. Equities had rallied to records on speculation Trump's policies would boost growth without destabilizing the global economy. Signs US expansion remained on uneven footing emerged Thursday, as data showed rising bond yields damped home purchases last month, while jobless claims rose more than forecast.

New US single-family home sales fell to a 10-month low in December after three straight months of solid gains, but the housing market recovery remains intact as a tightening labor market boosts wage growth. While other data on Thursday showed a bigger-than-expected increase in the number of Americans filing for unemployment benefits last week, the four-week moving average of claims dropped to levels last seen in 1973.

There was also good news on the economy with the goods trade deficit falling in December as exports rose. With trade expected to have weighed on economic growth in the fourth quarter, last month's rise in exports bodes well for output in early 2017.

The Commerce Department said new home sales dropped 10.4% to a seasonally adjusted annual rate of 536K units last month. Economists polled by Reuters had forecast single-family home sales, which account for 8.9% of overall home sales, slipping 1.0%.

 


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