US stocks staked fresh record high intraday and closing levels on Wednesday, with miners and supplier among the top gainers as US President Donald Trump signalled that construction of the Mexican partition would start within months.
But monetary ill-winds were blowing in, as a key measure of market expectations for US inflation crossed the 2% threshold for the first time since 2014 in the latest sign that investors are bracing for more robust price growth under the Trump administration – and more interest rate hikes.
The S&P 500 market bellwether ended up 0.8% at 2298 having scaled an intraday record high of 2,299.55 and led by data storage provider Seagate Technology (NASDAQ:STX) after strong earnings.
The Dow Jones Industrial Average peaked at a record 20,082.00 before closing up 0.8% at 20,068, while the Nasdaq Composite peaked at a record 5,658.59 before closing up 1% at 5656.
The S&P Midcap 400 ended up 0.8% at 1710 after hitting a record high intraday of 1711.41 as it broke above 1700 for the first time. It was led by Marketaxess Holdings (NASDAQ:MKTX) up11.1% to $175.99 after its fourth-quarter earnings.
The S&P Smallcap 600 closed up 1.1% at 846 and led by Arctic Cat Inc (NASDAQ:ACAT) up 41/7% at $18.55.
The wider small-cap Russell 2000 closed up 1% at 1382.
But after hours news was setting the market up for some downside on Thursday.
Qualcomm’s (NASDAQ:QCOM) profits fell by more than half in its latest quarter following a $868m fine from Korea’s antitrust authorities, as the mobile chipmaker pledged to “vigorously defend our business model” against mounting legal challenges.
The San Diego-based company posted slightly better-than-expected earnings while revenues came in a touch below Wall Street forecasts, as it grapples with a slowing smartphone market. Qualcomm shares were down 2.6% at $55.41 after the close.
Meanwhile, AT&T (NYSE:T) posted slightly weaker-than-forecast revenues in the fourth quarter, as it battles for market share in a cutthroat consumer mobile market.
The largest US telecoms group by market value reported earnings per share of 66 cents for the quarter, in line with analyst forecasts, while revenues of $41.8bn were just shy of the consensus of $42.04bn.
AT&T is betting on a proposed $84bn purchase of Time Warner as it looks to reinvent itself into a media and entertainment company, diversifying from the maturing wireless space. AT&T shares were down 0.3% at $41.25 after hours.
Late trading
US stocks marked fresh record highs on Wednesday, with the Dow Jones Industrial Average surpassing 20,000 for the first time.
It is nearly 18 years since the Dow pierced 10,000 and the ticker spent most of the fourth quarter of 2016 trying to double it. Soon after the US opening on Wednesday, it finally happened.
The Dow’s peak now is 20,082.00 and it was last seen up 0.8% at 20,074.
Meanwhile, the Nasdaq Composite hit a fresh record high of 5,654.30 and was last up 0.9% at 5651.
The S&P 500, the market’s bellwether, was not left out of proceedings. It hit a record summit of 2,298.00 and was last up 0.8% at 2297.
US President Donald Trump’s gusto to get on with his election pledges lay behind the gains, as a list of top infrastructure projects was released. That helped buoy building materials suppliers and miners.
READ: Top 50 Trump US infrastructure projects named
Trump also said that work would begin within months on a controversial Mexican partition, which he insisted would be paid for by Mexico and not US taxpayers.
But elsewhere, a resource whose price gains are directly related to the fortunes of Wall Street, headed south – although this time Wall Street wasn’t listening. The US oil benchmark West Texas Intermediate was down 0.7% at $52.82 after the latest oil inventories released by the EIA found output stubbornly strong in the past week. US crude inventories posted a larger-than-expected gain for the third straight week, while stocks of gasoline climbed by the most in three weeks.
That does not bode well for OPEC and Russia keeping their word to cull output as they agreed last year. But it also came as a glum prognosis of long-term oil prices was delivered by oil giant BP (NYSE:BP).
The world is facing a long-term oil glut as producers scramble to exploit reserves before demand for fossil fuels goes into decline, according to an assessment by BP which suggests oil companies should brace for prolonged pressure from weak prices.
In its annual take on the global energy outlook published on Wednesday, the UK oil and gas group said there was twice as much technically recoverable oil available than the world was likely to need between now and 2050. This made it likely there would be technically recoverable oil reserves which will never be extracted.
The top riser in the S&P 500 was data storage maker Seagate Technology (NASDAQ:STX) up 16.9% at $43.78, while another top gainer was rival Western Digital (NASDAQ:WDC) up 5.1% at $79.91.
Seagate reported impressive second-quarter fiscal 2017 results. Non-GAAP earnings of $1.38 per share beat the Zacks Consensus Estimate by 31 cents and surged almost 68.3% on a year-on-year basis. The massive growth was primarily driven by margin expansion.
Hopes were rising that Western Digital would have some good news too. It reports after the closing bell.
The gains come a day before heavyweight semiconductor firms report earnings: Intel (NASDAQ:INTC), Maxim (NASDAQ:MXIM), and Microsemi Corp (NASDAQ:MSCC)
The S&P Midcap 400 was up 0.7% at 1708 and led by builder NVR Inc (NYSE:NVR) up 10.6% at $1880.86 after announcing fourth quarter earnings.
The S&P Smallcap 600 was up 0.9% at 845 and led by Arctic Cat Inc (NASDAQ:ACAT) up 41.4% at $18.51 after agreeing to a takeover by Textron Inc which will acquire Arctic Cat in a cash transaction valued at approximately $247mln, plus the assumption of existing debt.
Pre-Open
US stocks are set to open at fresh record highs on Wednesday with cement makers such as Cemex among the risers on rumours US President Donald Trump will signal work on the Mexico partition wall.
The steel sector might also do well this session. Apart from demand for resources for the Mexican Wall, global steel production returned to growth in 2016, even as output of the grey metal shrank in many large producing nations such as Japan, the US, Russia, South Korea and Germany, a major survey said.
The amount of crude steel produced worldwide increased 0.8% to 1.628.5mln tonnes last year, according to the World Steel Association.
But the overall broad rally in equities is on account of continued optimism over Trump’s pro-business agenda.
The market bellwether S&P 500 is indicated up 0.4%, the tech-heavy Nasdaq Composite up 0.5% and the Dow Jones Industrial Aeverage up 0.5%. The DJIA, if able to rise by that proportion, would have all the ammo it needs – less than 100 points – to break above the 20,000 milestone for the first time.
Gains by the S&P 500 and Nasdaq would build upon record gains by the tickers on Tuesday.
President Trump is expected to sign an executive action Wednesday directing federal resources toward building a border wall with Mexico.
Shares in cement companies rallied Tuesday in anticipation of the announcement, expected during a visit to the Department of Homeland Security at 1325 ET (1825 GMT).
Mexico-based cement firm Cemex (NYSE:CX) stock which surged by 4% on Tuesday was up 1.6% at US$9.30 pre-market in New York.
Trump on Tuesday signed executive actions to advance the approval of two controversial oil pipelines -- Dakota Access and Keystone XL. His decision reverses efforts by former President Obama to block their construction.
Boosting the bourse on Wednesday will be news that Boeing (NYSE:BA) reported higher than expected earnings per share and revenues for the fourth quarter of last year and forecast a rise in aircraft deliveries for the current year.
Boeing’s core earnings per share rose to US$2.47 for the quarter ended December 31, up from US$1.60 a year earlier and well above market expectations of about US$2.32 per share. Fourth quarter revenue was US$23.3bn, slightly higher than analyst forecasts of US$23.1bn. Boeing shares were up 1.5% at US$162.99 pre-market.
Hess (NYSE:HES) continued to bleed red ink during the fourth quarter, with the US oil and gas explorer posting a US$4.89bn net loss as low crude prices force it to cut the value of its assets and pull back on production.
The company’s loss for the final three months of last year compares to the loss of US$1.82bn in the year ago period. Revenue for the quarter held steady at US$1.38bn.
Like other energy companies, Hess has struggled in the wake of the collapse in global crude prices.
United Technologies (NYSE:UTX), the maker of aerospace and building systems, delivered results that matched analysts’ estimates in the latest quarter, helped along by higher sales in its climate, controls and security unit.
The Connecticut-based company said profits were US$1bn in the three months ended in December, a turn-around from a loss of $2.56bn over the same period a year ago. That translated to earnings of US$1.26 a share, compared with a loss of 30 cents a share in the year ago period. However, it still missed analysts estimates for earnings of US$1.35 a share. UT shares were down 0.6% at US$111.
AT&T (NYSE:T) investors will be listening for news on its takeover of CNN's parent company, Time Warner (NYSE:T="" rel="5905" t-inc.="">NYSE:TWX). President Trump - who previously said he was opposed to the deal - recently met with AT&T CEO Randall Stephenson, although the takeover did not come up in their talks. AT&T shares were up 0.1% at US$41.41 pre-market and Time Warner shares were flat at US$96.35.
In data, US oil supplies, due at 1030 ET (1530 GMT), are forecast to have risen by 2.8mln barrels this week, up from 2.4mln a week earlier. Continued gains in supply could stem enthusiasm among OPEC nations and Russia to honour a supply cut that was announced last year.
US benchmark oil prices were lower. The WTI was 0.6% down at US$52.89.