Sustaining rally, Dow tops 19,000

Index surges to 6th record since election

Specialist Mario Picone sports a “Dow 19,000” hat as he works on the floor of the New York Stock Exchange on Tuesday. “The market is a lot more sure of itself now,” one strategist said.
Specialist Mario Picone sports a “Dow 19,000” hat as he works on the floor of the New York Stock Exchange on Tuesday. “The market is a lot more sure of itself now,” one strategist said.

NEW YORK -- The Dow Jones industrial average surpassed 19,000 for the first time Tuesday as a postelection rally drove indexes further into record territory.

The rally in equities that took stock indexes to records Monday continued as Donald Trump's presidential win has fueled optimism among stock traders that his pledge to cut taxes and increase fiscal spending will benefit industries.

The Dow rose 67.18 points, or 0.4 percent, to 19,023.87. The Standard & Poor's 500 index rose 4.76 points, or 0.2 percent, to 2,202.94. The Nasdaq composite rose 17.49 points, or 0.3 percent, to 5,386.35.

The Russell 2000 index, which tracks smaller companies, continued to set records as it traded higher for the 13th day in a row. It jumped 0.9 percent.

"There are strong signs that the U.S. economy is in good shape, and that bodes well for corporate earnings," said Heinz-Gerd Sonnenschein, an equity strategist at Deutsche Postbank AG in Bonn, Germany. "The market is a lot more sure of itself now."

The Dow has closed at a record high six times in the two weeks since the presidential election, but trading volume has fallen in recent days. U.S. trading will be closed Thursday for Thanksgiving, and markets will close early on Friday. Reports on new-home sales, durable goods and manufacturing are due today, as well as minutes from this month's Federal Reserve meeting.

It's been almost two years since the Dow cleared 18,000, a stretch during which stocks endured everything from falling earnings to the first interest-rate increase in nearly a decade to surprise political outcomes in the United States and Europe. While the thousand-point trip took four times as long as the previous one, the ascent is the latest sign of resilience in a bull market that's within months of reaching its eighth anniversary.

The 19,000 milestone arrived 700 days after the Dow crossed 18,000 on Dec. 23, 2014, for the sixth-slowest trip between thousands, data compiled by Bloomberg and S&P Dow Jones Indexes show. It took the index almost 5,200 days to go from 1,000 to 2,000 between 1972 and 1987, and the fastest was 35 days to 11,000 in May 1999.

Discount store chains made large gains on Tuesday as shoppers continued to flock to their outlets, but health care companies tumbled.

Dollar Tree raised its profit and sales forecasts after the chain reported solid results in the third quarter. Burlington Stores also raised its outlook after it posted a larger profit than analysts expected. Dollar Tree jumped $6.69, or 8.2 percent, to $88.68, and Burlington Stores rose $11.86, or 16 percent, to $86.04.

"The consumer in general is far more budget-conscious than they were in previous generations," Ken Perkins, president of research firm Retail Metrics, said of discount chains.

Retailers Home Depot, TJX and Signet Jewelers also rose as consumer stocks reached all-time highs. Perkins said chains such as Dollar Tree were able to win over new customers after the recession, and low-cost clothing companies such as TJX, the parent of TJ Maxx, have also performed well since that time.

Health care stocks, which are still trading lower than they were at the start of this year, took hefty losses after weak results from Medtronic, one of the world's largest medical device companies.

Matt Miksic, a medical device analyst for financial services company UBS, said some investors worried that Medtronic's results mean a lot of drug and medical device companies will face slower growth. Miksic said Medtronic reported weak sales "across pretty much every one of their categories in the U.S."

Medtronic shares sank $6.98, or 8.7 percent, to $73.60. Health care products giant Johnson & Johnson slid $2.26, or 2 percent, to $112.74 and Abbott Laboratories, which makes infant formula, drugs and medical devices, gave up $1.66, or 4.2 percent, to $38.10.

Medical supplier Patterson Cos. plunged, touching a three-year low, after it said its dental business struggled in the second quarter and its animal health business was hurt by weak prices for brand-name drugs. Patterson cuts its profit forecast and its shares dropped $7.95, or 16.7 percent, to $39.56.

Shares of industrial companies, including makers of aircraft and engines and other equipment, continued to rise. Boeing, Lockheed Martin and Northrop Grumman were trading around record highs before the election and they have done better than the broader market since then. Boeing climbed $2.50, or 1.7 percent, to $149.52 Tuesday.

Oil prices wobbled and energy companies fell. Benchmark U.S. crude lost 21 cents to $48.03 a barrel in New York. Brent crude, the international standard, rose 22 cents to $49.12 a barrel in London. The price of oil rose about 4 percent Monday.

Investors continued to sell short-term bonds, which sent their prices lower. The yield on the two-year Treasury note rose to 1.09 percent, its highest in six years. Longer-term bond prices held steady. The yield on the 10-year Treasury note remained at 2.31 percent.

The dollar, which is trading around 13-year highs, was little changed. It rose to 111.14 yen from 111.07 yen. The euro inched up to $1.0624 from $1.0612.

"The dollar is flying after Donald Trump's victory, and the rally should continue into early 2017 -- thereafter, the greenback could weaken," Royce Mendes, an economist at CIBC World Markets, wrote in a note.

Gold rose $1.40 to $1,211.20 an ounce. Silver gained 11 cents to $16.63 an ounce. Copper added 3 cents, or 1.2 percent, to $2.54 a pound.

Britain's FTSE 100 rose 0.6 percent. France's CAC 40 added 0.4 percent, and the DAX in Germany gained 0.3 percent. Japan's Nikkei 225 dipped after a powerful earthquake in northern Japan, but the index finished 0.3 percent higher. The earthquake set off a small tsunami, but it appeared to cause only minor damage and injuries. South Korea's Kospi rose 0.9 percent, and the Hang Seng in Hong Kong climbed 1.4 percent.

Information for this article was contributed by Marley Jay of The Associated Press and by Lu Wang, Rita Nazareth and Lukanyo Mnyanda of Bloomberg News.

A Section on 11/23/2016

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