Sun, Aug 06, 2017 - Page 14 News List

Dow posts eighth record close in a row

‘POSITIVE TONE’:US stock markets could be expected to see new highs next week on the back of strong second-quarter earnings, Solaris Group’s Tim Ghriskey said

Reuters, NEW YORK

A trader wears a cap with “Dow 22,000” written on it while working on the floor of the New York Stock Exchange on Wednesday.

Photo: AFP

The Dow Jones Industrial Average ended at its eighth straight record high on Friday, with gains in JPMorgan Chase & Co and other banks after data showed US employers hired more workers than expected last month.

The strong jobs report is likely to clear the way for the US Federal Reserve to announce a plan to start shrinking its US$4.2 trillion bond portfolio next month, and could strengthen its case to raise rates for the third time this year in December.

The US Department of Labor report showed non-farm payrolls increased by 209,000 jobs last month, above the 183,000 rise expected by economists polled by Reuters.

“It’s stability. That’s what the markets love. This still indicates that the expansion is on. That should provide some comfort,” said Bodhi Ganguli, lead economist at Dun & Bradstreet Inc in Short Hills, New Jersey.

With banks standing to benefit from higher interest rates, the S&P financial index rose 0.72 percent.

Goldman Sachs rose 2.59 percent and was the top contributor to the Dow’s gain for the day.

Perceived chances of an interest rate hike by the US central bank by the end of the year increased to 50 percent from 46 percent after the release of the data, according to CME Group Inc’s FedWatch tool.

Analysts on average expect S&P 500 earnings to have grown 12 percent in the second quarter and they project earnings up 9.3 percent for the September quarter, according to Thomson Reuters I/B/E/S.

“We would expect next week to see market highs again just based on the positive tone created by strong second-quarter earnings and favorable outlooks,” Solaris Group LLC chief investment officer Tim Ghriskey said. “We’re really in a sweet spot here.”

The Dow Jones Industrial Average on Friday rose 0.3 percent to end at 22,092.81, an all-time high. The S&P 500 gained 0.19 percent to 2,476.83 and the NASDAQ Composite added 0.18 percent to 6,351.56.

For the week, the Dow climbed 1.2 percent, the S&P 500 rose 0.2 percent and the NASDAQ shed 0.4 percent.

The S&P 500 materials index rose 0.48 percent, helped by a 1.07 percent rise in Dow Chemical Co.

The utilities, healthcare and consumer staples indices fell. Gilead Sciences Inc’s 1.63 percent fall and Allergan PLC’s 3.08 percent loss weighed on the healthcare index.

Walt Disney Co fell 1.31 percent and was the biggest drag on the Dow.

Viacom Inc slumped 13.83 percent after the company forecast a low single-digit dip in sales.

Yelp Inc jumped 27.67 percent after the company said it would sell its Eat24 business to GrubHub Inc for US$287.5 million and reported a better-than-expected quarterly revenue. GrubHub rose 9.20 percent.

About 6.0 billion shares changed hands in US exchanges on Friday, just below the 6.1 billion average over the past 20 sessions.

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