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Stock market records fall as Dow pushes above 19,000
Published: Nov 22, 2016 2:00 p.m.
By
Victor
Reklaitis
Markets writer
&
Ryan
Vlastelica
Markets reporter
U.S. stocks were little changed on Tuesday as major indexes pulled back from their latest in a string of all-time highs, on a day when both the Dow and S&P 500 topped psychological milestones.
Gains on the day were slight but broad, with only three of the S&P 500’s primary 11 sectors trading lower early. Consumer-discretionary names were among the biggest outperformers, lifted by retailers.
The Dow Jones Industrial Average DJIA, +0.22% rose 44 points, or 0.2%, to 19,0002. The blue-chip index touched 19,014.7 early in the session, its first time above 19,000.
Meanwhile, the S&P 500 index SPX, +0.00% rose 0.7 point to trade at 2,199, basically unchanged on the day. The Nasdaq Composite Index COMP, +0.13% rose 11 points, or 0.2%, to 5,379.
All three indexes hit new records, as did the Russell 2000 RUT, +0.39% index of small-cap stocks. With the four also hitting records on Monday, the Tuesday session marked the first time that they all hit intraday records on the same day for consecutive days since April 1998. If the four all close at records as well, that will be the first time that they all do so for consecutive days since March of that year.
The index was on track for its 13th straight daily rise, with a gain of 0.4%, which would be the longest such streak for the index since a 15-day stretch ending in February 1996. Adding to the positive tone, the S&P 500 topped 2,200 at its high of the day, while the Dow crossed 19,000 for its first time ever. Both round numbers are viewed as important moves for market sentiment, though they hold little fundamental or technical value.
Markets have been in a strong uptrend since the presidential election two weeks ago. Donald Trump’s unexpected victory was viewed as a positive for Wall Street, because the president-elect is expected to advocate for policies—including massive corporate tax cuts and financial and environmental deregulation—seen as supportive for economic growth.
“The postelection narrative is still in place, with investors continuing to focus on fiscal policy and regulatory easing. That’s giving the market reason to be optimistic, and it means that the path of least resistance is higher for now,” said Aaron Clark, a portfolio manager at GW&K Investment Management, which has $33 billion in assets under management.
Despite that, Clark added that “I’m surprised by how quickly markets have priced in the positive impact of the election, as though changes to taxes and regulation can be done with the snap of a finger. I don’t think we’ve overshot on the upside, but we could see buyer’s remorse if the market starts to think it is ignoring risk.”
The Consumer Discretionary Select Sector SPDR ETF XLY, +0.95% rose 1% as one of the top-performing sector funds on Tuesday. Retail names were strong, with Dollar Tree Inc. DLTR, +8.57% up 8.6% following better-than-expected sales, and Urban Outfitters Inc. URBN, +4.33% up 4%. The group could continue to benefit going into the holiday shopping season.
On the downside, health care stocks sold off sharply, with the Health Care Select Sector SPDR XLV, -1.72% down 1.6%. The group was pressured by Medtronic PLC MDT, -9.19% which dropped 9.3% after the maker of medical devices reported sales that missed expectations and cut its profit outlook.
Individual movers: Shares in Palo Alto Networks Inc. PANW, -12.92% fell 13% after the cybersecurity company late Monday reported its slowest quarterly revenue growth ever as a public company and projected the deceleration would continue this quarter.
Hormel Foods Corp. HRL, +2.32% posted quarterly profit that matched expectations, along with sales and an earnings outlook that beat forecasts. Hormel’s stock jumped 2.5%.
On the deals front, Dr Pepper Snapple Group Inc. DPS, +2.52% announced a $1.7 billion deal to buy Bai Brands, which makes antioxidant-infused drinks. Dr Pepper’s stock rose 2.4%.
Other markets: Europe’s main stock benchmark SXXP, +0.23% strolled higher, while Asian markets closed with gains. Gold futures GCZ6, +0.20% rose 0.2%, while the ICE U.S. Dollar Index DXY, +0.21% rose less than 0.1%. Crude oil CLX7, -0.50% sank 1.3% to $47.67 per barrel.
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