Dow tops 21,000 after Trump speech, rate hike talk

← Homepage

The Dow crossed the 21,000 mark for the first time on Wednesday after U.S. President Donald Trump's measured tone in his first speech to Congress lifted optimism and investors viewed a looming interest rate hike as a glass half full. The three main stock indexes were on track for their best one-day gain since Nov. 7, a day before the U.S. presidential election, with the S&P 500 and Nasdaq also hitting record highs. Trump on Tuesday said he wanted to boost the U.S. economy with a "massive" tax relief and make a $1 trillion effort on infrastructure, bets that have helped Wall Street scale fresh records since the Nov. 8 election. But it was a break in Trump's often-abrasive speaking style that encouraged many investors who have worried he may struggle to push his agenda through a Congress reluctant to widen the budget deficit."Trump came off very presidential and investors are drawing optimism from the way he delivered the message in his speech," said Andre Bakhos, managing director at Janlyn Capital in Bernardsville, New Jersey. The S&P financial index . SPSY soared 3.1 percent, outperforming the other 10 major sectors, also helped by key Federal Reserve officials who hinted at an interest rate hike this month. A Fed interest rate hike in March would be sooner than many investors expected and would make it more expensive to borrow money to buy stocks. But it would also signal policymakers' growing confidence in economic expansion after nearly a decade of tepid growth.

"It's not necessarily the rate increase that matters. It's that they're seeing things improving. If the Fed feels more confident, maybe we should too," said Warren West, principal at Greentree Brokerage Services in Philadelphia. Adding to expectations of stronger economic growth, the Institute for Supply Management said its manufacturing index rose in February to its highest since 2014. The perceived chances of a March rate hike also rose after the U.S. Commerce Department reported that January inflation ticked up by the most in four years.

Traders have now priced in a nearly 70 percent chance of a rate hike when the Fed's policy-setting body meets on March 14-15, according to Thomson Reuters data. If the Dow closes above 21,000, it will have taken 24 trading sessions since the index first closed above 20,000. That would match the fastest-ever move between thousand-point milestones, which happened between March and May 1999 and took the index above 11,000. At 2:40 p.m. EST (1940 GMT), the Dow Jones Industrial Average . DJI was up 1.64 percent at 21,154.17, while the S&P 500 . SPX had gained 1.49 percent to 2,398.93. The Nasdaq Composite . IXIC added 1.36 percent to 5,904.90.

Snap to price long-awaited IPO on Wednesday amid signs of brisk demand Snap Inc, owner of popular messaging app Snapchat, will price its initial public offering after the U.S. stock market closes on Wednesday in the most eagerly awaited technology IPO since Chinese e-commerce giant Alibaba went public in 2014.

More Wells Fargo customers may be affected by sales scandal: filing More Wells Fargo & Co customers may have been affected by a scandal over phony accounts than previously believed, the third-largest U.S. lender said in a regulatory filing on Wednesday.

Oil pares gains after U.S. crude stocks build to record high NEW YORK Oil prices were largely steady on Wednesday, paring gains and briefly turning negative, after crude inventories in the United States rose to a record high.