Stocks eke out another gain as Wall Street awaits economic policy details from Trump
Wall Street notched another set of milestones Monday as the Dow Jones industrial average closed at a record high for the 12th consecutive time, the longest winning streak for the 30-company average in 30 years.
The Standard & Poor’s 500 index, the benchmark favored by professional investors, also closed at a record high.
The latest push into the record books came on an indecisive day for U.S. stocks that sent indexes wavering between small gains and losses for much of the day. They ultimately eked out tiny gains, led by energy stocks, which climbed as the price of crude oil rose. Phone companies lagged behind the most.
Many investors were taking a wait-and-see approach ahead of President Trump’s speech to Congress on Tuesday, hoping for details of promised tax cuts, infrastructure spending and other business-friendly policies.
“It’s all about policy now,” said Phil Blancato, chief executive of Ladenburg Thalmann Asset Management. “There’s only so much the market can deliver when there’s still these many unknowns, specifically the Washington impact is now as much a head wind as it is a tail wind.”
The Dow Jones industrial average rose 15.68 points, or 0.1%, to 20,837.44. The S&P 500 gained 2.39 points, or 0.1%, to 2,369.73. The Nasdaq composite index added 16.59 points, or 0.3%, to 5,861.90. Small-company stocks fared better than the other indexes, sending the Russell 2000 index up 13.44 points, or 1%, to 1,407.97.
The last time the Dow posted a longer winning streak was in early January 1987, when the average rose for 13 days in a row. That streak translated into a gain of 11% for the Dow. Nine months later, on Oct. 19, 1987, the Dow plummeted more than 500 points, or about 22%, on what became known as Black Monday.
Just because the Dow is on another lengthy winning streak doesn’t mean a similar market slump is in the cards now, noted Ryan Detrick, a senior market strategist for LPL Financial.
One key difference is that the Dow went on to gain an additional 30% in the months after the 13-day streak in January 1987. By comparison, the Dow is now up about 5.4% this year, so there’s a long way to go before the market becomes as stretched as it was 30 years ago, Detrick said.
“That isn’t to say a normal correction after the big surge since the U.S. election isn’t possible — it is — but a major bear market correction is still something we’d call a low percentage scenario right now,” he said.
U.S. stocks have benefited from the Trump administration’s promise of pro-business changes, but investors have become uneasy over how large and rapid those changes will be.
During a meeting with governors Monday, Trump noted that his upcoming budget would include a big boost to defense spending. The White House separately said that the budget would include a $54-billion increase in defense spending while imposing corresponding cuts to domestic programs and foreign aid.
Talk of more defense spending gave a lift to defense contractors Monday. Raytheon added $1.35, or 0.9%, to $154.83. Northrop Grumman gained $3.55, or 1.4%, to $248.60. Lockheed Martin climbed $5.18, or 2%, to $269.36.
Expectations that the Trump administration will ramp up infrastructure spending projects also gave materials companies a boost. Martin Marietta Materials rose $5.21, or 2.5%, to $215.26, while Vulcan Materials added $2.78, or 2.4%, to $120.60. Summit Materials gained 50 cents, or 2.1%, to $24.25.
Trump’s speech Tuesday to a joint session of Congress is expected to include more details of how the administration plans to carry out promises to cut taxes and step up infrastructure spending.
“The markets had this incredible run, much of it based on potential tax policy, and what everyone wants to see tomorrow night is some more details,” said JJ Kinahan, chief market strategist at TD Ameritrade.
Traders also weighed the latest crop of company earnings and outlooks.
Tegna climbed 3.5% after the media company’s latest earnings beat Wall Street’s estimates. The stock rose 86 cents to $25.66.
Power company AES fell 6.6% after its full-year profit forecast disappointed investors. The stock lost 79 cents to $11.14.
Consumer stocks were among the biggest decliners as shares in several supermarket operators fell. Kroger slid $1.07, or 3.2%, to $32.22, while Whole Foods Market fell 46 cents, or 1.5%, at $31.10.
Benchmark U.S. crude rose 6 cents to close at $54.05 a barrel in New York. Brent crude, used to price international oils, slipped 6 cents to close at $55.93 in London.
Bond prices fell. The 10-year Treasury yield rose to 2.37% from 2.32% late Friday.
Major stock indexes overseas were mixed. In Europe, Germany’s DAX rose 0.2%, while France’s CAC-40 was flat. London’s FTSE-100 added 0.1%. In Asia, Tokyo’s Nikkei 225 index fell 0.9%. Hong Kong’s Hang Seng slid 0.2%. Seoul’s Kospi shed 0.4%. Sydney’s S&P-ASX 200 lost 0.3%.
The dollar rose to 112.80 yen from Friday’s 111.98 yen. The euro rose to $1.0589 from $1.0565.
In other energy trading, wholesale gasoline added 2 cents to $1.53 a gallon, while heating oil was little changed at $1.64 a gallon. Natural gas futures shed 9 cents, or 3.4%, at $2.69 per 1,000 cubic feet.
Among metals, the price of gold edged up 50 cents to $1,258.80 an ounce. Silver added 2 cents to $18.35 an ounce. Copper rose a penny to $2.69 a pound.
3:00 p.m.: This article was updated with closing stock prices.
This article was originally published at 7:05 a.m.
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