US close: Dow closes above 20,000 as Trump signs Mexico wall order
As new President Donald Trump rubber stamped the building of a wall between the US and Mexico, the Dow Jones cemented its early breach of the historic 20,000 barrier for the first time on Wednesday by closing above that hurdle.
On top of the billionaire property developer's bricklaying plans, he also pleased Wall Street with orders to reduce the regulatory burden on domestic manufacturers and the construction of two major new oil pipelines, with investors also running the rule over a deluge of earnings.
The Dow finished up a bigly 0.78% to 20,068.51, the S&P 500 ended the day 0.80% higher at 2,298.37, and the Nasdaq increased almost 1% to 5,656.34.
Market analyst Neil Wilson at ETX Capital said: “The Dow has capped a remarkable rally since Donald Trump’s election by finally breaking the 20,000 level. It’s psychologically huge and, after a bit of pullback ahead of the inauguration, really confirms that the ‘great rotation' from bonds to stocks is definitely upon us. Fears about protectionism are running second to optimism about inflation and growth – for now at least.
“Trump’s election victory, far from roiling markets, has been greeted with universal optimism about what it means for global growth. Something like $3trn has been pulled from bonds and $3trn pumped into equities.”
Wilson said the rally could mean, either "Trump will usher in a Reaganesque shift in the US economy, fuelling a massive reallocation of investment from cash to productive capital”, or that it is “a massive bubble, irrational exuberance of the worst kind that will come unstuck when Trump fails to deliver the reflationary policies that the market is pinning its hopes on”.
The US dollar was down 0.2% against the euro at $1.0752, 0.9% versus the pound at $1.2631, and 0.5% on the yen to ¥113.22, with some analysts saying investors should hold off until Trump proves he is more than just talk.
"Investors now need to see the detail as to how these policies will be drafted, the impact on the budget deficit and the extent to which Congress is on board," said senior FX strategist Jane Foley at Rabobank.
"Without this detail USD bulls are unlikely to regain the upper hand."
Meanwhile, oil prices faltered as the Energy Information Administration that showed crude inventories rose and gasoline stocks increased. West Texas Intermediate was 0.56% weaker at $52.88 and Brent crude was down 0.34% to $55.25 a barrel.
Investors had a busy day sifting through a raft of earnings.
Boeing led the Dow's historic rise, flying more than 4% higher as the airplane maker beat earnings expectations for the fourth quarter and said that it will deliver more aircrafts in 2017, even though revenue could fall.
Caterpillar was revved up by the Presidential construction plans, climbing up to second on the leaderboard, while major banks JP Morgan Chase and Goldman Sachs were both up at least 1.5%.
Aluminium giant Alcoa gained after its overnight quarterly revenue beat estimates and the company sounded an upbeat note on aluminium demand for this year.
Texas Instruments nudged up after posting a jump in fourth-quarter profit and sales also late on Tuesday.
Meanwhile, United Technologies was down after the jet-engine and building-systems manufacturer reported that fourth quarter profit fell and kept its outlook unchanged.
Miner Freeport-McMoran declined after missing fourth quarter expectations but gold sales doubled.
After the close eBay impressed with its quarterly results, while earnings releases from AT&T and Qualcomm were mixed.
Dow Jones - Risers
Boeing Co. (BA) $167.36 4.24%
Caterpillar Inc. (CAT) $98.18 1.98%
Apple Inc. (AAPL) $121.85 1.57%
JP Morgan Chase & Co. (JPM) $86.03 1.55%
Goldman Sachs Group Inc. (GS) $237.25 1.53%
International Business Machines Corp. (IBM) $178.29 1.36%
General Electric Co. (GE) $30.37 1.23%
Johnson & Johnson (JNJ) $112.80 0.93%
E.I. du Pont de Nemours and Co. (DD) $76.67 0.82%
Visa Inc. (V) $83.90 0.80%
Dow Jones - Fallers
Procter & Gamble Co. (PG) $87.16 -0.80%
Wal-Mart Stores Inc. (WMT) $66.90 -0.76%
Verizon Communications Inc. (VZ) $49.77 -0.70%
American Express Co. (AXP) $76.89 -0.70%
United Technologies Corp. (UTX) $110.96 -0.58%
Home Depot Inc. (HD) $137.48 -0.42%
Merck & Co. Inc. (MRK) $61.08 -0.21%
Walt Disney Co. (DIS) $108.04 0.13%
Microsoft Corp. (MSFT) $63.68 0.25%
Exxon Mobil Corp. (XOM) $85.34 0.29%
S&P 500 - Risers
Seagate Technology Plc (STX) $42.67 13.97%
Rockwell Automation Inc. (ROK) $152.98 7.73%
Huntington Bancshares Inc. (HBAN) $14.02 5.81%
Hanesbrands Inc. (HBI) $23.83 5.30%
Western Digital Corp. (WDC) $80.02 5.28%
Intuitive Surgical Inc. (ISRG) $700.00 5.10%
TE Connectivity Ltd (TEL) $75.16 4.87%
Boeing Co. (BA) $167.36 4.24%
Fluor Corp. (FLR) $56.84 3.78%
International Paper Co. (IP) $57.99 3.74%
S&P 500 - Fallers
Textron Inc. (TXT) $46.73 -5.37%
CA Inc. (CA) $31.31 -4.98%
State Street Corp. (STT) $77.80 -3.38%
United States Steel Corp. (X) $32.15 -3.22%
Discovery Communications Inc. Class A (DISCA) $27.58 -3.19%
Freeport-McMoRan Inc (FCX) $16.50 -3.06%
Newmont Mining Corp. (NEM) $34.95 -3.02%
Navient Corporation (NAVI) $15.72 -3.02%
CVS Health Corp (CVS) $79.49 -2.80%
Total System Services Inc. (TSS) $51.71 -2.78%