Dow Reaches Record, Tech Shares Slump as Markets Assess Trump
United States markets were mostly higher on Thursday, with the Dow Jones industrial reaching and besting its all time high from August. The market is following a big rally on Wednesday after the stunning results of the US presidential election.
By Paolo Palazzi-Xirinachs
Thursday, November 10, 2016 - 00:00
In early afternoon trading, the Dow rose 1.49%, and the S&P 500 was up 0.66%. The Nasdaq lost ground sharply today, dragged down by a slide in technology stocks, as investors poured money into sectors that may benefit from the Republican win in the US election.
While opinions vary about what’s behind the tech rout, one possibility was concern about the impact of Trump’s policies on trade overseas, where US technology companies thrive. Others see a rational retreat for a group that through Election Day had surged 11% in 2016, or even the potential for retaliation by the president-elect against an industry that didn’t exactly cozy up to him during the campaign.
The US election results have put many investors in a buying mood, giving many global stock indexes a lift early Thursday. Traders were focusing on the incoming administration's promises to bolster economic growth through infrastructure spending, rather than uncertainties such as what might happen with trade agreements. Before the election, markets were worried about a Trump presidency because his campaign promises carried very little in the way of policy details, making him an unknown quantity compared with his rival, Hillary Clinton.
Meanwhile, Federal Reserve officials stressed the importance of the central bank’s independence from political influence following the unexpected victory of Trump, who had been a harsh critic of Chair Janet Yellen during his campaign. Investors currently see an 84% probability of a quarter percentage-point hike at their Dec.13-14 meeting, according to pricing in federal funds futures.
Shares of several big banks were also moving higher among speculation that Mr. Trump’s administration could result in higher interest rates and less government regulation, which tend to benefit banks and other financial stocks. JPMorgan Chase stock climbed 2.9%, the highest gainer in the Dow. Goldman Sachs stock rose 2.1%. Wells Fargo gained $3.01, or 6.3%, to $51, while Discover Financial Services added $3.03, or 5%, to $63.32.
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