USA stocks close higher as Dow sets 12th straight record close

A measure of investor sentiment from Bank of America Merrill Lynch reached a 16-month high in February, but remained below levels hit as the market bottomed in March 2009.

In early trade, the Dow Jones Industrial Average was up 198.2 points, or 0.95 per cent, at 21,010.44, the S&P 500 was up 19.1 points, or 0.80 per cent, at 2,382.74 and the Nasdaq Composite was up 47.22 points, or 0.81 per cent, at 5,872.66.

Trump on Tuesday said he wanted to boost the USA economy with a “massive” tax relief and make a $1 trillion effort on infrastructure, themes that have helped Wall Street scale new records since the November elections.

The president’s call for a $1 trillion infrastructure plan also generated some positive sentiment along with his apparent willingness to compromise on immigration.

European stocks are back in favour. Fed minutes from the January-February meeting said another rate hike would come “fairly soon”.

He said that he remains “wary of the inflationary implications of the president’s policies”.

He also said that the Fed should be tactical in taking opportunities to hike.

The past day alone has accounted for almost 28% of the capital investors have added to the S&P 500 since Trump’s election 113 days ago.

Industrial stocks and phone companies were also among the big decliners. The Standard & Poor’s 500 closed at 2,363.64 for a loss of 6.11 points or 0.26%. “The sustainability of this rally in the near term may well rest on how Trump performs this evening and whether promises of big spending and phenomenal tax reforms are accompanied by any insight into what they will entail”. The index has advanced just 3.9 percent during its longest rally since 1987.

Meanwhile, West Texas Intermediate up 0.57% to $54.32 per barrel and Brent crude rose 0.79% to $56.97.

As the markets have continued to post incremental gains – and the Dow tangled with its 1987-era record high streak – some investors anxious whether stocks had gotten ahead of themselves before real policy proposals could be put forward by the Trump administration.

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher during trading on Wednesday. The PCE price index rose 0.3%, as anticipated, while the 12-month PCE climbed 1.9%, its largest increase since 2012.

In other energy trading, wholesale gasoline shed 2 cents to $1.51 a gallon, while heating oil slid 2 cents to $1.62 a gallon.

But on Wall Street, financial and consumer discretionary stocks dropped and pulled down the three major indexes, which were set for their worst one-day decline in four weeks. Traders are still likely to keep an eye on the weekly jobless claims report.