While you were sleeping: Wall St climbs to records, Intel sinks
By Margreet Dietz
Jan. 4 (BusinessDesk) - Wall Street ascended to record highs as the latest US manufacturing data underpinned optimism about the economic outlook, while oil prices advanced to the highest level in more than two years.
In 12.53pm trading in New York, the Dow Jones Industrial Average added 0.3 percent, while the Nasdaq Composite Index rallied 0.8 percent. In 1.02pm trading, the Standard & Poor’s 500 Index increased 0.5 percent. Tech stocks including IBM gained.
“If you look at the S&P 500 and what makes up the sectors, technology has the largest international exposure,” Jeff Powell, managing partner of Polaris Wealth Advisors, told Reuters. “When you look at driving futures sales, it has to come from growing economies.”
The Dow touched a record high of 24,909.55, while the S&P 500 climbed to a record of 2,709.24, and the Nasdaq hit a record of 7,064.88.
The Dow climbed as advances in shares of IBM and those of General Electric, recently up 3.2 percent and 1.5 percent respectively, outweighed slides in shares of Intel and those of Verizon, down 4.6 percent and 1.9 percent recently respectively.
Shares of Intel slid, bucking the trend for the industry's shares, after a report that a design flaw in its processor chips leaves them vulnerable to hackers.
“This is a potential PR nightmare,” Dan Ives, head of tech research at GBH Insights, told Bloomberg. “They need to get ahead of this and try to contain any of the damage to customers as well to the brand.”
In the latest US economic data, an Institute for Supply Management report showed its index of national factory activity rose more than expected in December, climbing to 59.7, from 58.2 in November.
The report underpinned expectations the Federal Reserve will raise interest rates again soon, with the central bank having signalled three hikes for 2018.
“Strong manufacturing and construction data confirm the US economy is firing on all cylinders at the turn of the year,” Sal Guatieri, a senior economist at BMO Capital Markets in Toronto, told Reuters. “The Fed remains solidly on track to lift rates again in March and two more times this year, with possible upside risk if growth doesn’t simmer down.”
Meanwhile, music streaming service Spotify has filed confidentially for an initial public offering with the US Securities and Exchange Commission and is moving ahead with a direct listing in the first half of the year, Reuters reported, citing a source familiar with the matter. Axios first reported the confidential filing.
In Europe, the Stoxx 600 Index finished the session with a 0.5 percent gain from the previous close. Germany’s DAX Index climbed 0.8 percent, while France’s CAC40 Index also rose 0.8 percent, and the UK’s FTSE 100 index increased 0.3 percent.
A German government report showed the nation's unemployment rate fell to a record low in December, bolstering optimism about the outlook for the eurozone's largest economy.
“People are not afraid to spend money because unemployment is so low and that boosts domestic demand,” Jens Kramer, an economist at NordLB in Hanover, told Bloomberg. “It’s something of a miracle that wage growth was so moderate after we effectively had full employment for two years in Germany. We should eventually see pressure for higher wages this year.”