Thursday 10 November 2016 17.05 GMT
Sean Farrell and Graeme Wearden
Donald Trump’s victory in the US presidential election was expected to spook investors after a campaign defined by divisive, protectionist rhetoric.
Yet on the second day after his election Wall Street investors were in a bullish mood, with the Dow Jones industrial average hitting a record high. The Dow rose as much as 191 points to reach 18,780 by 1pm in New York, while the other two main US stock market indexes, the S&P 500 and Nasdaq, also climbed.
Conner Campbell at financial betting firm SpreadEx said: “Before [Wednesday] morning Trump was toxic yet now … he is the biggest turn-on the market has seen in months.”
In the days before the vote, share indexes rose when it looked like Hillary Clinton was winning and fell at a hint that Trump could catch her.
On 7 November, the day before the election, the Dow had its best day for eight months after the FBI cleared Clinton over her private email server. And on Wednesday markets duly plunged in early trading as Asian and European investors responded to the shock result.
But by the time Wall Street opened for business Trump had made a conciliatory acceptance speech in which he promised to heal divisions and work with other countries. After a volatile opening as investors tried to make sense of events, the Dow rose on the day.
Shares rose partly on relief at Trump’s tone and the lack of references to erecting trade barriers or a wall across the Mexican border. Trump also rowed back on threats to sack Janet Yellen, who chairs the Federal Reserve central bank.
Traders then looked for opportunities. If Trump was going to be more sensible than his campaign pronouncements implied, then what about his policies? Trump has pledged to cut corporation tax, a move all businesses would like.
He has promised to cut back regulation and scrap climate change targets, including abandoning the Paris agreement to reduce emissions. Oil and gas shares duly rose.
Speculation that the Republicans could ease rules on banks, including scrapping the Dodd-Frank regulations introduced after the 2008 financial crisis to curb risky behaviour, sent bank shares soaring.
In his victory speech, Trump talked about putting Americans to work to overhaul the country’s creaking infrastructure. These promises sent shares of mining and construction companies up.
Drug companies also rose. Both Trump and Clinton talked about reining in charges for treatments but Clinton was more aggressive and specific.
Tom Elliott, an analyst at financial advisers deVere, said a Trump presidency had created opportunities for investors but that they should prepare for a bumpy ride.
“Trump’s plans could well increase overall demand in the economy, boost growth and corporate earnings in the near term but result in inflation further down the line. A typical boom and bust scenario may follow.”
https://www.theguardian.com/business/2016/nov/10/why-has-dow-jones-hit-a-record-high-following-trumps-victoryDow Jones Closes at Record High
Wall Street rearranged its bets to benefit from Donald Trump's presidency
U.S. banking sector shares on Thursday surged to levels not seen since the midst of the 2008 financial crisis, pushing the Dow to an all-time high, while technology shares sank as Wall Street rearranged its bets to benefit from Donald Trump’s presidency.
The S&P 500 financial sector surged 3.70 percent to its highest since the 2008 financial crisis, bringing its gain since Trump’s surprise victory in Tuesday’s election to 7.9 percent, its biggest two-day gain since 2011.
Shares of Wells Fargo & Co jumped 7.58 percent to their highest since January, and have now erased all of the losses incurred in the wake of a scandal over fake accounts opened by its employees. Bank of Americasurged 4.40 percent and JPMorgan Chase rallied 4.64 percent to a record high.
Trump has sided with leading conservatives in calling for the repeal of the 2010 Dodd-Frank Financial Reform Act largely opposed by banks.
“The Trump campaign did say it would repeal Dodd-Frank. Rates are higher and the yield curve is steeper. Those are all good things for the banks,” said Warren West, principal at Greentree Brokerage Services in Philadelphia.
Apple dropped 2.79 percent while Amazon.com fell 3.82 percent and the S&P 500 technology index fell 1.59 percent.
The Dow Jones industrial average jumped 1.17 percent to end at 18,807.88, smashing through its previous record high set in August by almost 1 percent.
The S&P 500 rose 0.2 percent to 2,167.48 while the Nasdaq Composite dropped 0.81 percent to 5,208.80, hurt by losses in tech shares.
With Thursday’s gain, the Dow is up 8 percent in 2016 and the S&P 500 is up 6 percent.
High-dividend sectors utilities, telecom services and consumer staples sold off by more than 2 percent as bond yields rose due to expectations of higher interest rates.
The market got a lift after St. Louis Federal Reserve President James Bullard said the Republican sweep of the White House and Congress could break the current gridlock over national policy in a potential boon to the U.S. economy.
Industrials trailed the financials with a 2.05 percent advance.
Macy’s rose 5.6 percent after the department store operator raised its full-year sales forecast and announced a partnership to monetize some of its real-estate assets.
After the bell, Nordstrom reported quarterly results that sent its shares 5 percent higher while Walt Disney’s quarterly report pushed its stock down 2.6 percent.
Declining issues outnumbered advancing ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favored advancers.
The S&P 500 posted 84 new 52-week highs and seven new lows; the Nasdaq Composite recorded 336 new highs and 48 new lows.
About 12.3 billion shares changed hands on U.S. exchanges, far above the 7.3 billion daily average over the last 20 sessions.
http://time.com/4567001/dow-jones-record-high-close/
18,807.88
+218.19 (1.17%)
| Range | 18,603.14 - 18,873.66 |
| 52 week | 15,450.56 - 18,873.66 |
| Open | 18,603.14 |
| Vol. | 164.39M |
