Last updated on July 2nd, 2019 at 09:09 am
(Reuters) – The Dow Jones Industrial Average was higher in midday trading after hitting 20,000 for the first time on Wednesday as strong earnings and President Donald Trump’s pro-growth initiatives reignited a post-election rally.
Trump has made several business-friendly decisions since taking office on Friday, including signing executive orders to reduce regulatory burden on domestic manufacturers and clearing the way for the construction of two oil pipelines.
The S&P 500 and the Nasdaq Composite indexes also hit record intraday highs, amid gains across sectors.
The Dow came within a point of the historic mark on Jan. 6, as investors banked on pro-growth policies and tax cuts many expect from the new administration.
However, the index had struggled in recent weeks as investors grew cautious as they looked for clarity on the new administration’s policies.
“Trump has a majority of both houses, so the likelihood of things getting done quicker than they usually do is higher,” said Mark Spellman, portfolio manager at Alpine Funds. “He can fast-track a lot of policies which is typically not the case.”
Trump, a real estate mogul and a former reality television star, marked the moment with a tweet: “Great!#Dow20K”.
Sentiment was also lifted by better-than-expected fourth-quarter earnings. Of the 104 S&P 500 companies that have reported earnings so far, nearly 70 percent have beaten expectations, according to Thomson Reuters.
“Earnings (growth) hasn’t been bad and there is some surprise to the upside too,” said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.
If the Dow remains above 20,000 by closing time, the 42-session surge from the first close above 19,000 would mark the second-shortest length of time between such milestones.
The most rapid rise was between 10,000 and 11,000 from March 29 to May 3, which took 24 days. The rise from 18,000 to 19,000 took the Dow 483 trading sessions.
The surge since Nov. 22, when the index closed above 19,000 for the first time, has been spearheaded by financial stocks – with Goldman Sachs and JPMorgan accounting for about 20 percent of the gain.
(Reporting by Yashaswini Swamynathan and Tanya Agrawal in Bengaluru)
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