New York: The S&P 500 and Nasdaq set record highs on Tuesday in a broad rally led by financial and technology stocks.
The advance comes as quarterly earnings season heats up and investors become optimistic that clarity on President Donald Trump’s economic policies will be forthcoming.
Trump signed two executive orders on Tuesday to move forward with construction of the controversial Keystone XL and Dakota Access oil pipelines, rolling back key Obama administration environmental actions in favour of expanding energy infrastructure. He also met with chief executives of the Big Three U.S. automakers to push for more cars to be built in the United States.
“He is coming out of the gate strong and he is doing a lot of the things he said he would,” said Joe Saluzzi, co-manager of trading at Themis Trading in Chatham, New Jersey.
“On top of that, earnings aren’t a disaster so far, so why not – you’ve been stuck in a range and why not lift off to the next level?”
Profits of S&P 500 companies are estimated to have risen 6.7 percent in the latest quarter, marking the strongest growth in two years, according to Thomson Reuters I/B/E/S.
Despite stalling in recent weeks, the post-election rally has contributed to somewhat lofty valuations. The S&P 500 is trading at about 17 times forward 12-month earnings, according to Thomson Reuters Datastream, compared with the 10-year median of 14.2.
The Dow Jones Industrial Average rose 112.86 points, or 0.57 percent, to 19,912.71, the S&P 500 gained 14.87 points, or 0.66 percent, to 2,280.07 and the Nasdaq Composite added 48.01 points, or 0.86 percent, to 5,600.96.
Automaker shares advanced, with GM up 1.0 percent, Ford up 2.4 percent and Fiat Chrysler surging 5.8 percent. The S&P financial sector climbed 1.2 percent. The index had surged more than 16 percent in the wake of the election to the end of 2016 but has struggled in the new year, losing more than 1 percent through Monday.
Materials jumped 2.5 percent for their best day since March. The sector was bolstered by a 4.5-percent rise in DuPont, which reported a better-than-expected quarterly profit.
IBM, up 2.8 percent, and Intel, up 2.3 percent, were among the top boosts to the S&P 500 and helped lift the tech sector by 1 percent for its best day this year.
Yahoo rose 3.5 percent after the company reported better-than-expected quarterly profit and revenue and said the sale of its core internet business to Verizon should be completed in the second quarter.
Advancing issues outnumbered declining ones on the NYSE by a 2.84-to-1 ratio; on Nasdaq, a 2.56-to-1 ratio favoured advancers.
The S&P 500 posted 48 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 121 new highs and 29 new lows.
About 6.96 billion shares changed hands in U.S. exchanges, above the 6.16 billion daily average over the last 20 sessions.