US Markets Surge; Dow Tops 21000 For First Time Ever

If the Dow closes above 21,000, it would have taken 24 trading sessions since the blue-chip index first closed above 20,000, matching the fastest move between thousand-point milestones, which happened between March and May 1999 and took the index above 11,000.

The Dow jumped 222 points, or 1 percent, to 21,034, a new record, shortly after trade opened.

The S&P 500 index gained 22.45 points to 2,386.09 while the tech-focused Nasdaq Composite index was up 44.59 points at 5,870.03.

Almost every Dow stock was up. However, even if the Dow’s historic run comes to an end, the index is on pace for a healthy monthly gain of 4.9%. Ultimately that is the key benchmark here, yes the speech was optimistic and Mr Trump did come across as more Presidential, however the speech merely confirmed a lot of the details that had been heavily trailed before.

Bank stocks were also on fire on Wednesday, although Trump didn’t say anything in his speech about efforts to rip up the Dodd-Frank Wall Street reform law. Consumers, the torchbearers for the US economy, increased spending by a solid 3%. The tech-heavy Nasdaq was down 0.3 percent.

The US economy in 2016 grew by 1.9% in the second quarter, which was weaker than expected at 2.1%, according to a revised report. Energy and materials companies were also among the big gainers, while utilities and real estate stocks lagged.

“That isn’t to say a normal correction after the big surge since the USA election isn’t possible, it is, but a major bear market correction is still something we’d call a low percentage scenario right now”, he said.

Later in the day, the Federal Reserve is scheduled to release its Beige Book, a compilation of anecdotal evidence on economic conditions in the twelve Fed districts.

Reflecting the strength in the financial sector, the Dow Jones Banks Index has jumped by 3.2 percent to a nine-year intraday high, while the NYSE Arca Broker/Dealer Index has surged up by 2.6 percent. The 10-year Treasury yield rose to 2.46 percent from 2.40 percent late Tuesday. The major indexes were also supported by strong gains in Asia and Europe.

For a look at the issues now facing the markets, make sure to read today’s Ahead of Wall Street article. “It looks like the Fed is committed to a path of normalization”, said Bob Michele, head of the global fixed income, currencies and commodities group at J.P. Morgan Asset Management.

THE QUOTE: “It’s nice to see the Dow put another thousand figure up so quickly”, said Paul Christopher, head global market strategist for Wells Fargo Investment Institute.