Dow Jones Index (DJIA) Posts Record Close on Good Economic Data
The Dow Jones Industrial Average (DJIA) hit an all-time high on Monday as the stocks witnessed another strong day. The S&P 500 was lifted higher by the strong financial sector, and the NASDAQ also gained on the back of rallying technology stocks.
The better-than-expected services data by the Institute of Supply Management (ISM) and high oil prices played their role in this rally, which continues on high optimism regarding future growth. This optimism is helping to get over the concerns surrounding the political and economic situation in Italy.
The Dow Jones Index surged about 46 points and closed at 19,216.24, overtaking its previous high of 19,191 posted on December 1. Financials led the rally in the DJIA.
The S&P 500 index gained about 0.6% and closed at 2,204.71.
Bank stocks and energy stocks were the big gainers. Bank of America Corp (NYSE:BAC) rose almost three percent and Citigroup Inc (NYSE:C) gained over two percent. Chesapeake Energy Corporation (NYSE:CHK) went up by 3.4%.
Among Dow Jones stocks, Goldman Sachs Group Inc (NYSE:GS) gained 2.3% and JPMorgan Chase & Co. (NYSE:JPM) was also up about two percent. Nike Inc (NYSE:NKE) went up by 2.75% and Visa Inc (NYSE:V) gained 2.1%. These were the top gainers in the Dow Jones.
The NASDAQ Composite Index rose about one percent to close at 5,308.89. Adobe Systems Incorporated (NASDAQ:ADBE) was up more than two percent and Amazon.com, Inc. (NASDAQ:AMZN) gained 2.6%, but the major gainers were Citrix Systems, Inc. (NASDAQ:CTXS) and NVIDIA Corporation (NASDAQ:NVDA), which rallied by almost four percent.
Bank stocks have rallied on the expectations of a rate hike by the U.S. Federal Reserve, which may soon turn into reality next week. The rally in bank stocks and pharma stocks, as well as industrials, had also helped the Dow Jones Index in posting impressive gains in the past.
Markets, including the DJIA, have been buoyed ever since Donald Trump won the U.S. presidential election. The economy is expected to get a boost from his proposed tax cuts and infrastructure spending. Trump also announced his plans to impose a 35% tax for U.S. companies that plan to move abroad.
As Italy charts its course after Prime Minister Matteo Renzi’s loss in a constitutional referendum, stocks and the Dow Jones Index seem to have moved on. After voters in Italy rejected constitutional changes, dealing a major blow to Renzi, markets will be focused on what is happening in Italy. However, attention may now be more on U.S Fed policies as investors await the central bank’s meetings over the coming days.
The Dow Jones Index may still go a little higher on the expectations of a rate hike and optimism on future growth.