US stocks pinned a 12th record high close on Monday, as the Dow was sent north by energy stocks, growing expectations of a March rate hike and hopes for more details from President Donald Trump about his tax and regulation plans.
Energy shares helped the Dow to a 12th consecutive record close — its longest such streak since January 1987 – and it also managed to snug in a new record high intraday of 20,851.33.
The Dow Jones Industrial Average ended the day 0.1% higher at 20,837. Meanwhile, the S&P 500, the market bellwether, also rose 0.1% to close at a record high of 2,369.72. The S&P 500 also managed to mark a fresh intraday record high, of 2,371.54.
The Nasdaq Composite finished the day 0.2% higher at 5,855.40, but unable to emulate the intraday record high of 5,866.96 achieved mid-week last week.
The advance in US stocks came as investors awaited President Trump’s remarks to a joint session of Congress on Tuesday and the prospect of any details on tax legislation and Trump’s promised fiscal stimulus plans.
Meanwhile, interest rate hike expectations which were around 30% two weeks ago, are now set at 50-50 to be hiked next month, as policymakers at the US central bank closely scrutinise economic data in their debate to tighten monetary policy.
The top riser among S&P 500 stock was Illumina Inc (NASDAQ:ILMN) after broker Vetr upgraded Illumina from a buy rating to a strong-buy rating and currently has $181.98 price target on the life sciences company’s stock.
The S&P Midcap 400 closed up 0.7% at 1748 and led by Sotheby's Holdings (NYSE:BID) up 15.7% to $46.39 after a bumper fourth quarter earnings report.
The S&P Smallcap 600 closed up 0.8% at 859 and led by Installed Building Products I (NYSE:IBP) up 12% at $45.90 after the construction and building firm’s fourth quarter earnings.
US stocks are set to open softer on Monday as investors take another pause after months of record highs for the bourse and an easing off the clutch seen last week.
Although the Dow Jones Industrial Average posted another record high close in the final hour on Friday – its eleventh successive record high close - and it was also the intraday high of the day, the victory was rather pyrrhic as the levels achieved were lower than the intraday record high on Thursday suggesting the Dow was running out of steam.
The S&P 500 and Nasdaq Composite both registered intraday highs at the close too, although well below intraday and closing highs seen midweek.
But for investors it could be viewed as a market half empty, or half full. The gains for all three major tickers came in the last 30 minutes of trading and followed US President Donald Trump’s executive order setting up task forces to look at how the issue of deregulation which the market has craved.
On that basis there is some prospect of gains later in the session, although the starting gun isn’t looking so promising.
The S&P 500 market bellwether and Dow are seen opening 0.05% lower and the Nasdaq 0.2% down. On that basis, anything is possible for the S&P and Dow although the downside is still accentuated.
A month on from cracking 20,000 – and more than a month in the making – the Dow is still in good shape to take on 21,000 after ending at 20,821.76 on Friday.
It’s a big day for Trump’s already-tarnished reputation. He needs a smooth win with his nomiee for Commerce Secretary.
The US Senate iwill vote Monday on billionaire Wilbur Ross' nomination as commerce secretary.
The famed investor is known for buying distressed companies and has been called the "King of Bankruptcy." He is expected to help Trump's trade agenda.
Trump has been astute at rounding up industry figureheads to gauge what is on their minds and to bounce off them his own proposals. On Monday Trump will face a sector that has been left stunned by what appears to have been a volte face from the president. Pharmaceuticals.
During the campaign he went contrary to rival Hillary Clinton on capping drug prices only to say in December that he would clamp down on drug prices although he remains determined to overhaul Obamacare. Which way the wind is blowing the sector might find out on Monday as he meets with attendees including Humana (NYSE:HUM) CEO Bruce Broussard.
Trump's first executive order directed federal agencies to start rolling back Obamacare. He has promised to unveil a plan to repeal and replace the health insurance scheme with more affordable coverage, though he has left many in the dark about the details -- including congressional Republicans.
Feeding the downside on Monday, however, were shares of Shutterstock Inc (NYSE:SSTK), the online photo library. The shares plunged 10.9% to $46.00 pre-market, even if not enough to shutter the stock. The company reported fourth-quarter profit of $9.9mln and net income of 27 cents a share But it fell way short of Street forecasts for 43 cents.
On the flipside, Sotheby’s (NYSE:BID) the auctioneers were up 6.4% to $42.65 pre-market after the company beat estimates and reported fourth-quarter net income of $65.5mln, or $1.20 per share, compared with a loss of $11.2mln, or 17 cents per share, for the same period last year.
Apple shares (NASDAQ:AAPL) may get a lift on Monday after it was revealed to media that Berkshire Hathaway more than doubled its stake in Apple after the end of 2016 to more than $18bn, according to chief executive Warren Buffett.
Buffett said that Berkshire had stopped buying Apple shares after the technology group reported its quarterly earnings at the end of January given the increase in the company’s stock price. Apple shares have climbed 12.6 per cent since then and are up by 41.3 per cent over the past 12 months.
So far, Apple shares are up 0.2% at $136.98 pre-market.
In data, US durable goods orders climbed in January, but a closely-watched gauge of capital spending by American businesses slipped, according to data released on Monday.
Durable goods orders climbed by 1.8% last month, the commerce department said, exceeding expectations of a 1.6% rise.
But non-defense capital goods orders excluding aircraft — which is seen as a proxy for business investment in big-ticket items — dropped by 0.4%. That represented the biggest fall since September, and came in well below estimates of a 0.5% rise.