- The Dow Jones industrial average topped 26,000 in early trading on Tuesday as the fourth-quarter reporting season got into full swing.
- Investors expect strong earnings, supported by corporate tax cuts and global economic growth.
- This marks the index’s fastest 1,000-point rise; as the index climbs, this milestone requires a smaller percentage-point move to achieve.
The Dow Jones industrial average surged more than 200 points on Tuesday, lifting the blue-chip index above 26,000 for the first time as the fourth-quarter reporting season kicked into high gear.
At 9:36 a.m. ET, the Dow was up 218 points, or.85%, at 26,022.
This marked its fastest 1000-point rise. It ended above 25,000 on Jan. 4, seven trading days ago. As the index increases in value, it takes smaller percentage-point moves to achieve 1000-point milestones.
Hopes of strong quarterly earnings, supported by steep cut in corporate taxes, and solid global economic growth have bolstered Wall Street’s optimism in the start to 2018.
“Not only is the U.S. coming off a strong quarter, but the new tax reform measures are continuing to provide a boost, with investors keen to hear more about what impact this will have on future earnings,” said Craig Erlam, senior market analyst at online foreign exchange broker Oanda.
More than three quarters of the 26 S&P 500 companies that have reported so far have topped profit estimates, according to Thomson Reuters I/B/E/S.
The S&P 500 topped 2,800 for the first time on Tuesday. It was up 12.5 points, or 0.54%, while the Nasdaq was up 0.76%.
Shortly after the market open, Dow component UnitedHealth rose 2.3% after the largest U.S. health insurer reported results that beat analysts’ estimates and raised its full-year profit forecast.
CitigroupInc jumped 1.2% after the lender reported profit that topped Wall Street expectations as strength in consumer businesses made up for lower revenue from bond and currency trading.
General Motors rose 2.1% after the company said it expects earnings in 2018 to be largely flat, compared with 2017, but that profits should pick up pace in 2019.
General Electric shares fell 3.3% after the industrial conglomerate said it would record a $US6.2 billion charge in the fourth quarter as part of an ongoing review of its finance arm’s insurance portfolio.
Oil prices pulled back from recent highs on Tuesday, with Brent crude, the international benchmark, dipping 0.1% to $US69.55 per barrel.
Hershey fell 0.2% after Goldman Sachs downgraded the stock to “sell”.
Bitcoin tumbled 18% to a four-week trough close to $US11,000, after reports that a ban on trading of cryptocurrencies in South Korea was still an option. Shares of cryptocurrency-related companies were all down. Marathon Patent, Riot BlockChain, Xunlei and Overstock.com fell between 4 per cent and 13 per cent.
(Reuters reporting by Sruthi Shankar in Bengaluru; Editing by Anil D’Silva)