The Dow Jones Industrial Average finally moved above 20,000 this week, following a series of failed attempts to do so earlier in the year. Records also were set by the S&P 500 and the NASDAQ, as Wall Street continued to see the economic glass as half full. The Dow Transportation Average also set a new all-time high, up nearly 40% over the past twelve months. The milestone “round number” is mostly psychological, however, as there was no market technical resistance level to breach. Nonetheless, it is certainly historic.
For the week, the Dow was up over 1.3%, while the S&P 500 moved higher by one percent and the NASDAQ by about 2%. Nearly 500 NYSE stocks reached new 52-week highs vs. only 41 registering new lows and advancing stocks eclipsed decliners by 2:1. Basic materials were the clear winner with an average gain of over 3% for the week, followed by technology, industrial and financial stocks. Telecoms took a breather, losing about 1.5%. The Federal Reserve will meet this week, but there does not appear to be anything surprising as to its change on interest rate policy.
Earnings season, so far, has been mixed, but with a positive bias for the future. This week we will hear from some blog components, notably United Parcel Service, Harris Corp., Danaher and chemical giant LyondellBasell. The case for optimism on the economy is still compelling, especially in housing and on the employment front. However, with valuations now rich, disappointments out of Washington, changes in Europe, trade policy repercussions, earnings guidance or surprises from the Federal Reserve, could be dealt with harshly.
Here is the answer to last week’s trivia question: The Borgata Hotel Casino in Atlantic City is owned by? MGM Resorts, Caesars Entertainment, Wynn Resorts or Las Vegas Sands. Answer: MGM Resorts. MGM purchased the 50% joint-venture share of the Borgata last year from Boyd Gaming for $589 million, after deducting Boyd’s share of Borgata’s debt.
Today’s Trivia Question: The Dow Jones Industrial Average closed above 20,000 for the first time on January 25, 2017. It reached the milestone 10,000 level on March 29 of what year? 1989, 1992, 1999 or 2008.