Stocks to records; Dow breaks the January record

NEW YORK – Wall Street reached a new milestone on Thursday, with a wave of purchases that pushed up US stocks, pushing the Dow Jones industrial average above January's record high.

The S & P 500, the benchmark for many index funds, also hit a new high, eclipsing the peak of last month.

Technology, banking and health care stocks accounted for much of the recovery.

Energy companies fell, as did crude oil prices.

A weaker dollar, which helps US exporters, and essentially encouraging economic reports helped investors buy, a recovery from the start of the week, as the US and China announced new tariffs.

"Some of the economic data that was released today continued to show strength," Lindsey Bell, an investment strategist at CFRA, said Thursday. "Given the strength of the economy, supported by tax reform and fiscal stimulus in general, these measures should offset some of the impact of tariffs at the end of the year." # 39; & # 39;

The S & P 500 gained 22.80 points, or 0.8%, at 2,930.75. The Dow Jones gained 251.22 points, or 1%, to 26.656.98. Nasdaq Composite rose 78.19 points, or 1%, to 8,028.23. The Russell 2000 Small Business Index rose 17.25 points, or 1%, to 1,720.18.

The road to the last records was barely smooth. After peaking in January, the Dow plunged in February and March, bringing the index down to 11.6% from its January high. Investors are worried about rising interest rates and the potential impact of the US-China trade dispute on the Dow's large industrial companies.

With the Federal Reserve clearly signaling its policy – gradual rate increases, including two more this year – and the US economy firming up, the market has recently held back trade and pushed the Dow and S & P 500 to new markets. highs.

The Dow Jones is now up 7.8% over the year, while the S & P 500 is up 9.6%.

The Federal Reserve announced Thursday that the value of US equity and mutual fund portfolios increased by $ 800 billion last quarter, helping to boost US household wealth to $ 106.9 billion. quarter of April-June.

At the same time, stock market wealth has disproportionately – and increasingly important – flowed to the wealthiest households. The richest tenth of Americans owns about 84% of the value of stocks.

The Dow Jones and the S & P 500 were on track to set records starting Thursday as investors analyzed a slew of economic data.

The weekly number of requests for unemployment assistance from the Department of Labor was lower than expected, with claims falling last week to 201,000, the smallest since November 1969.

An economic index of the Federal Reserve Bank in Philadelphia also exceeded expectations and the Conference Board's Leading Indicators Index, designed to anticipate economic conditions of three to six months, rose 0.4% last month . Although slightly below expectations, this suggests the economy is safe, said Tracie McMillion of the Wells Fargo Investment Institute.

& # 39; & # 39; With a [reading] it is highly unlikely that there will be a recession on the horizon, "McMillion said. "The US market responds to this economic base of strength. Added to this is a dollar that has begun to depreciate a bit and is good news for US companies trading abroad. "

A weaker dollar is particularly good for large cap companies doing business abroad because they make their products more competitive.

The dollar rose to 112.48 yen against 112.27 yen on Wednesday. The euro has strengthened to 1.1776 dollar against 1.1674 dollar. The pound climbed to $ 1.3268 against $ 1.3145.

Mixed data on US home sales and mortgage rates weighed on homebuilders' inventories.

The National Association of Realtors said that previously occupied housing sales were stable in August, after falling over the previous four months.

Separately, mortgage buyer Freddie Mac said the average 30-year fixed rate mortgage rate climbed to 4.65% this week, its highest level since May.

Starting Monday, the United States will apply a 10% tariff on the $ 200 billion worth of Chinese goods. Rates will increase to 25% on January 1st.

Beijing said it would take "countermeasures", which would involve US $ 60 billion worth of imports, including coffee, honey and industrial chemicals, with retaliatory measures.

"Part of the reason you see such an improvement today is that the rates were lower than expected," said Bell. "The market remains optimistic about resolving this problem, perhaps not before mid-term. [elections]but hopefully before the end of the year. "

Some of the biggest gains on Thursday went to tech companies. Apple gained 0.8% to $ 220.03, while Microsoft grew 1.7% to $ 113.57.

Health care companies also posted solid gains. Cardinal Health rose 2.3% to $ 55.17.

Canadian marijuana producer Tilray fell 17.6% to $ 176.35 a day after the stock rose 38%.

Bond prices have gone up. The 10-year Treasury bond yield dropped to 3.06% from 3.08% on Wednesday night.

Gold rose 0.2% to $ 1,211.30 an ounce. Silver gained 0.2% to $ 14.31 an ounce. Copper added 0.4% to $ 2.74 per pound.

The benchmark US crude fell 0.4% to $ 70.80 per barrel. Brent crude, used to fix international oil prices, fell 0.9% to $ 78.70.

In the other energy sectors, heating oil declined 0.8% to $ 2.23 per gallon, wholesale gasoline lost 0.4% to $ 2 a gallon, and natural gas jumped 2%. 3% at $ 2.98 per 1,000 cubic feet.

Major indices in Europe posted solid gains on Thursday. The German DAX gained 0.9%, while the French CAC 40 gained 1.1%. The British FTSE 100 added 0.5%.

Asian markets have been mixed. Japan's Nikkei 225 finished flat. Kospi in South Korea added 0.7%. Hong Kong's Hang Seng Index rose 0.3%. Australia S & P / ASX 200 lost 0.3%. Shares fell in Taiwan but rose in Indonesia, Thailand and Singapore.