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Stocks

Dow Jones rallies to close over 23,000 for first time ever as sterling earnings spark US stocks

Dow takes only 54 trading days to go from 22,000 to 23,000

PUBLISHED : Thursday, 19 October, 2017, 7:42am
UPDATED : Thursday, 19 October, 2017, 7:42am

The Dow Jones Industrial Average closed above the 23,000 level for the first time on Wednesday, driven by a jump in IBM after the computing giant hinted at a return to revenue growth.

The close above 23,000 came just 54 trading days after the Dow hit 22,000 on August 2. That’s roughly half the time it took the index to move from 21,000 to 22,000, and marks the fourth time this year the Dow has reached a 1,000-point milestone.

“Retail investors continue to pour into the marketplace, and with each headline about a new record, and especially round numbers like that, people tend to feel like they’re missing out and you kind of suck more people into the market,” said Ian Winer, head of equities at Wedbush Securities in Los Angeles.

“Ultimately, the only way you’re going to top is by getting everybody all in. And we’re getting close.”

The Dow Jones Industrial Average rose 160.16 points, or 0.7 per cent, to end at 23,157.6, the S&P 500 gained 1.9 points, or 0.07 per cent, to 2,561.26 and the Nasdaq Composite added 0.56 points, or 0.01 per cent, to 6,624.22.

The Dow had briefly surpassed the all-time peak on Tuesday but closed just shy of it. The S&P 500 and Nasdaq also hit record closing highs.

Shares of IBM, which beat expectations on revenue, jumped 8.9 per cent and accounted for about 90 points of the day’s 160 point-gain in the blue-chip index.

Solid earnings, stronger economic growth and hopes that President Donald Trump may be able to make progress on tax cuts have helped the market rally this year.

“Today the catalyst is clearly IBM … which appears to have turned the corner. It gave the Dow the boost to stay over 23,000,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

The financial index jumped 0.6 per cent, led by bank stocks recovering from recent post-earnings losses. Bullish calls by brokerages helped to support the bank shares.

Bank shares had run up ahead of recent results, which resulted in some selling following the earnings news, said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

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