Dow on Track for 6th Straight Gain as Tech Boosts Wall Street
Walt Disney to buy 21st Century Fox in $52.4 billion deal
U.S. stocks rose modestly on Thursday, with major indexes aiming for intraday records and the Dow on track for its sixth straight daily advance.
The technology sector was one of the biggest boosts to the day, offsetting weakness in defensive industries like telecom and utilities. Positive data also supported the market, as did additional clarity on global central-bank policy, while investors also digested the latest information on the tax-cut bill set to emerge out of Washington.
What are indexes doing?
The Dow Jones Industrial Average DJIA rose 43 points, or 0.2%, to 24,629, briefly hitting an intraday all-time high at 24,672.48. The blue-chip average has risen for five straight sessions and closed at a record for the past four.
The S&P 500 SPX rose 2 points to 2,665, a gain of 0.1%, while the Nasdaq Composite Index COMP was up 12 points, or 0.2%, to 6,888.
What’s driving the markets?
Sales at U.S. retailers climbed 0.8% in November, the start of the holiday shopping season. The increase was twice as large as the MarketWatch forecast. Separately, jobless claims fell 11,000 in the latest week, while U.S. import prices rose 0.7% in November.
The flash U.S. manufacturing PMI rose to 55 from 53.9 in November, while the flash U.S. services activity index fell to 52.4 from 54.5. Any reading above 50 indicates improving conditions.
Business inventories fell 0.1% in October.
Details of the Republican tax deal have started to trickle out, with the big elements including a corporate tax rate of 21% and top individual rate of 27%. The corporate rate is currently 35%.
Traders are likely to watch comments out of the ECB for a steer on the future unwinding of its stimulus measures. As widely expected, the ECB’s announced no change to record-low interest rates.
Separately, the Bank of England held key interest rates at 0.5%, as expected, in a 9-0 vote. The central bank raised rates for the first time in a decade in November.
The monetary policy updates come a day after the Fed lifted a key short-term U.S. interest rate to a range of 1.25% to 1.5%, but in a sign of caution, stuck to its earlier forecast for just three 1/4-point rate increases in 2018.
What are strategists saying?
“There’s so much money floating around the system, and so long as central banks keep that liquidity in place, which they’re doing, I think the market will have room to run higher,” said Luis Maizel, senior managing director at LM Capital Group, who speculated there was an additional upside of 8-10% in stocks.
“Retail sales were strong, and jobless claims were lower than expected, but we’re not seeing good jobs get created, and there’s no pressure on wages going up.”
Which stocks are in focus?
Shares of 21st Century Fox Inc. FOXA rose 3.3% after Walt Disney Co. DIS announced it would buy the media company in a deal valued at $52.4 billion. Shares of Disney dipped 0.1%.
Teva Pharmaceuticals Industries Ltd. TEVA surged 14% after announcing additional restructuring measures, including the loss of 14,000 jobs in the next two years, and the immediate suspension of dividends and cancellation of 2017 bonuses.
Shares of Sanderson Farms Inc. SAFM dropped 6% after the poultry producer posted weaker-than-expected fiscal fourth-quarter profit.
Valeant Pharmaceuticals VRX fell 5.2% after J.P. Morgan downgraded the stock to underweight from neutral.
Tech shares were among the biggest boosts to the day. Alphabet Inc. GOOGL the parent company of Google, rose 1.3% while Facebook Inc. FB was up 0.9%.
What are other markets doing?
Climbing higher on Thursday, gold GCG8 rose 0.4%.
The ICE U.S. Dollar Index DXY rose 0.2%, supported by the economic data.
Crude-oil prices CLF8 were little changed on the day. In its closely watched monthly oil report, the International Energy Agency said U.S. shale producers pushed global oil supply to its highest level in a year.
Bitcoin futures XBTF8 rose to $17,200 in their fourth full day of trading, while the spot price BTCUSD for the most active digital currency rose to $16,590.96.
Stocks in Europe SXXP, traded lower, while Asian markets ADOW, finished mostly in the red as financials fell on news of the Fed interest-rate hike.