US open: Record highs as Trump appointments inspire gains

US equity markets were sprouting green on Monday as new President Donald Trump inspired further gains and investors looked ahead with no fear for Federal Reserve chair Janet Yellen semi-annual testimony before Congress.

The Dow Jones Industrial Average bagged another record open, climbing 0.5% to 20,371.13, while the S&P 500 gained 0.39% to 2,325.02 and the Nasdaq was 0.48% higher to 5,761.68 at 1528 GMT.

This was in spite of a retreat by oil prices, with West Texas Intermediate down 1.46% at $53.08 a barrel and Brent crude falling 1.66% to $55.77.

Building on last week's optimism over Trump’s “phenomenal” tax tease, where the populist billionaire said he was planning the most ambitious tax reform since the Reagan era in the coming weeks, a further boost on Monday came as ex Goldman Sachs top brass Steve Mnuchin moved to within hours of his confirmation as Treasury secretary.

Wall Street was buoyed as investors began to price in the benefits of a Goldman Sachs-led Treasury Department, said analyst Jasper Lawler at London Capital Group.

"Trump’s agenda of financial deregulation will likely have another supporter in the form Mnuchin. Mnuchin and [director of the White House National Economic Council] Gary Cohn will be a more ‘internationalist’ influence on Trump, potentially putting a lid the President’s penchant for currency wars and trade tariffs," Lawler said.

"The benefit to Wall Street of having an ex-Goldman Sachs banker as Treasury Secretary is pretty self-evident. In extension, it would make sense for Mnuchin to fill key positions at the treasury with his people, namely other Wall Streeters. Senior Goldman Sachs banker Jim Donovan as well as Justin Muzinich, a former Morgan Stanley worker are reportedly being considered for key positions."

Bank and industrial stocks were among the biggest gainers on Monday, with Goldman Sachs up 1.66% and JP Morgan Chase & Co climbing 1.36%, while Caterpillar added 1.42%.

Trump had also wrapped up a visit from Japanese Prime Minister Shinzo Abe last week and was preparing to meet Canadian Prime Minister Justin Trudeau later on in the day to discuss Nafta, which the president has called “the worst trade deal in history”.

Michael Hewson, chief market analyst at CMC Markets, said: “The initial belligerence of the Trump administration towards China and Japan appears to have given way to a more practicable way of doing things, and while peace may not have broken out quite yet, some welcome pragmatism does appear to be taking hold in Washington.

“This change of tack along with the optimism about the reflation trade has given additional impetus to a trend that had been in danger of stalling as recently as a week ago. Investors hope that this theme continues when President Trump meets Canadian PM Justin Trudeau who hasn’t been shy in expressing his opposition to some of Trump’s recent policy pronouncements.”

Meanwhile, investors were also preparing for Yellen testimony and key inflation data. Yellen will appear before the Senate on Thursday and the House on Friday, along with the publication of data on inflation, retail and employment.

The minutes of latest FOMC meeting when the Fed stood pat on interest rates will be published on 22 February.

In currency markets, the dollar was flat against the pound to 0.8005, rose 0.39% versus the euro to 0.9435 and was 0.7% stronger against the yen to 114.01.

In corporate news, Verizon Communications fell 1.16% after the wireless carrier started selling unlimited data plans again for the first time since 2011.

On the up side, Teva Pharmaceutical Industries was up 4.77% after quarterly revenue and earnings best analysts’ expectations but swung to a loss.

BHP Billiton rose 0.82% after the miner declared a force majeure due to a strike at its copper mine in Chile, which sent copper prices hitting 20-month highs on supply concerns.

Dow Jones - Risers

Caterpillar Inc. (CAT) $98.54 2.32%
JP Morgan Chase & Co. (JPM) $88.47 1.69%
Goldman Sachs Group Inc. (GS) $246.60 1.60%
Boeing Co. (BA) $168.60 1.43%
Apple Inc. (AAPL) $133.66 1.17%
Pfizer Inc. (PFE) $32.67 1.00%
Microsoft Corp. (MSFT) $64.50 0.79%
Cisco Systems Inc. (CSCO) $31.75 0.76%
United Technologies Corp. (UTX) $111.81 0.69%
Unitedhealth Group Inc. (UNH) $161.68 0.58%

Dow Jones - Fallers

Verizon Communications Inc. (VZ) $48.54 -0.90%
Nike Inc. (NKE) $55.86 -0.64%
Home Depot Inc. (HD) $139.26 -0.42%
Travelers Company Inc. (TRV) $119.30 -0.36%
Wal-Mart Stores Inc. (WMT) $67.78 -0.35%
Procter & Gamble Co. (PG) $87.97 -0.00%
McDonald's Corp. (MCD) $125.98 0.13%
Walt Disney Co. (DIS) $109.54 0.26%
Coca-Cola Co. (KO) $40.69 0.26%
Visa Inc. (V) $86.16 0.30%

S&P 500 - Risers

United States Steel Corp. (X) $39.79 5.82%
Mosaic Company (MOS) $34.17 3.99%
Nucor Corp. (NUE) $63.19 3.61%
Regeneron Pharmaceuticals Inc. (REGN) $370.80 3.04%
Goodyear Tire & Rubber Co. (GT) $34.59 2.58%
Alcoa Corporation (AA) $39.24 2.45%
E*TRADE Financial Corp. (ETFC) $36.39 2.33%
Caterpillar Inc. (CAT) $98.54 2.32%
Macy's Inc. (M) $32.72 2.27%
CF Industries Holdings Inc. (CF) $36.61 2.15%

S&P 500 - Fallers

Gap Inc. (GPS) $23.46 -3.69%
Nvidia Corp. (NVDA) $110.30 -2.92%
Activision Blizzard Inc. (ATVI) $45.94 -2.72%
Nordstrom Inc. (JWN) $43.87 -2.51%
Kohls Corp. (KSS) $41.08 -2.28%
Occidental Petroleum Corp. (OXY) $67.10 -2.00%
EQT Corp. (EQT) $63.08 -1.97%
Southwestern Energy Co. (SWN) $8.85 -1.78%
Target Corp. (TGT) $64.62 -1.69%
Marathon Oil Corp. (MRO) $15.93 -1.64%