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US stocks mark record highs but Dow’s 20,000 awaits another day

Last updated: 21:20 20 Dec 2016 GMT, First published: 08:40 20 Dec 2016 GMT

US stocks hit record highs, 20,000 test fails

US stocks closed higher on Tuesday, after marking some fresh record highs, while the dollar scaled 14-year highs, but with the Dow failing to claim the 20,000 level this time.

The markets were buoyed by the strength of the dollar.

The dollar continued its steady advance a week after the Federal Reserve hiked rates and promised more to come in 2017, and briefly hit a 14-year peak as markets continued to measure the potential fallout from yesterday’s violent attack on a Christmas market in Berlin and the shock assassination of Russia’s ambassador to Turkey in Ankara.

The S&P 500 market bellwether ended up 0.4% at 2270, after marking a record high intraday of 2,272.56, while the Nasdaq, up 0.5% at 5,483 earlier hit a record high of 5,489.47.

The Dow Jones Industrial Average came within 13 points of clinching 20,000 at one point – a record high of 19.987.63 after a rally in shares of financials, led by Goldman Sachs, and consumer stocks - but in the end it closed up 0.5% at 19.974.

The top gainer on the S&P 500 was CarMax Inc (NYSE:KMX) closed up 6% at $66.10 ager the auto parts wholesaler’s third quarter earnings beat forecasts although as so often with such results, the revenues missed estimates.

CarMax posted earnings per share of 72 cents in the third quarter of fiscal 2017 ended Nov 30, highlighting an increase of 14.3% from 63 cents earned a year ago. Zacks estimated 71 cents.

Net sales and operating revenues in the reported quarter rose 4.4% year over year to $3.7bn. However, the figure lagged the Zacks estimate of $3.79bn.

The S&P Midcap 400 closed up 0.5% at 1687 while the S&P Smallcap 600 finished up 1% at 854.


Early trading

US markets mark fresh record high on Tuesday, but Dow’s 20,000 test fails.

The traditional benchmark Dow Jones Industrial Average scaled a fresh record of 19.987.63 in early trading – just 13 points from the much-trailed 20,000 level while the S&P 500 market behemoth hit a fresh record at 2,272.56.

Having overcome earlier anxieties over geopolitical risks in Europe and buoyed by the – as expected – more dovish tone of the Fed Chair Janet Yellen’s speech on Monday, the bourse was in upbeat mood.

The Dow Jones was last up 0.4% at 19,967 while the S&P 500 was up 0.4% at 2,270.

On Monday, Fed Chair Janet Yellen gave a fairly upbeat outlook on the US economy during a commencement speech at the University of Baltimore. "You are entering the strongest job market in nearly a decade," Yellen said, adding that the current unemployment rate "has been associated with good job opportunities."

The S&P 500 was led higher by travel guides publisher Tripadvisor Inc (NASDAQ:TRIP) up 6.9% to $49.69 after the company said it had agreed to begin adding hotel inventory from select Expedia, Inc. (NASDAQ:EXPE) brands to the Tripadvisor instant booking platform. As part of the initial test, select hotel inventory from Expedia brands will be available to book on Tripadvisor's US desktop site.

Expedia shares were up 1.1% at $117.56.

Meanwhile, the S&P Midcap 400 was up 0.4% at 1684 and led higher by United States Steel Corp (NYSE:X), up 5.2% to $36.26 after broker Vetr upgraded shares of United States Steel from a hold rating to a strong-buy rating.

But brokers at Zacks warned investors to pay close attention to USS share price based on moves in the options market lately. That is because the Put which expires on Jan 20, 2017 for the $7.00 strike price had some of the highest implied volatility of all equity options on Tuesday.

The best gains were among small-caps as the S&P 600 jumped by 0.7% to 852 and led by Fred's Inc (FRED), up 81% to $20.18 after news that rival Walgreens Boots Alliance (NASDAQ:WBA) had agreed to sell 865 stores to the group. Read more.

Fred’s also dominated the wider small-cap ticker Russell 2000 which was up 0.7% to 1380.


Pre-Open

US stocks are set to open higher on Tuesday but not by enough to test record highs struck last week.

With the gravity of the attack on a Berlin Christmas market last night becoming clearer – German authorities suspect it was a terror attack – an attack on an Islamic centre in Zurich and the assassination of the Russian ambassador to Turkey in Ankara also overnight, investors are keener to stow cash in the bond market than equities.

Still, the S&P 500 is indicated opening up 0.3% while the Dow Jones Industrial Average is expected to advance by 50 points, or 0.3% - not enough to scale the 20,000 watershed level.

But the fact that markets are poised to go higher at all given the geopolitical risks overnight is an achievement in itself.

Canada’s Blackberry (TSE:BB, NASDAQ:BBRY), was up 2.2% at $7.88 pre-market on Wall Street after the formerly dominant smartphone company — now largely a software provider — reported adjusted quarterly profit of 2 cents per share, compared to estimates of a 1 cent per share loss. Revenue was below Street forecasts, but Blackberry did raise its full-year outlook.

But General Mills (NYSE:GIS) the foodmaker missed estimates by one cent a share, with adjusted quarterly profit of 85 cents per share. Revenue missed the mark, as well, on weaker sales of brands like Yoplait yogurt and Progresso soup. Shares were down 3% at $61.14 pre-market.

Cruise ship operator Carnival (NYSE:CCL) are releasing quarterly earnings before the open Tuesday.

Shares were indicated up 0.6% at $51.60. On Monday, the stock fell after Berenberg downgraded the stocks to hold from buy. Read more.

The Bank of Japan opted to hold interest rates steady and has made no change to its economic stimulus measures. This decision was widely expected.

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