Stocks close at record highs as tech losses are offset by energy gains
U.S. stocks closed slightly higher on Wednesday, notching record highs, as a gain in the energy sector offset losses in tech.
The Dow Jones industrial average rose 39.3 points to close at 22,158.18, a record, with Chevron contributing the most to the gains. Apple, however, was the biggest loser in the index.
The S&P 500 rose 0.1 percent and finished the session at 2,498.37, also a record, as energy gained more than 1 percent to lead advancers.
Energy stocks received a boost from oil prices, which rose 2.2 percent to a five-week high of $49.30 per barrel on an improving demand outlook.
Technology stocks were among the worst performers, however, falling 0.2 percent after closing at a record high on Tuesday.
“The real key for the market will revolve around whether Technology can strengthen from here given its push up towards highs of its recent range, while Apple starts to show some evidence of peaking out in the short run,” said Mark Newton, managing member at Newton Advisors, in a note.”
The Nasdaq composite closed 0.1 percent higher at 6,460.19 despite shares of Apple dropping 0.8 percent.
The three major indexes closed at new highs together for the second straight session. However, they traded flat for most of the day.
“This is not a surprise. We’ve had two pretty strong days,” said Peter Cardillo, chief market economist at First Standard Financial. “That puts the S&P 500 on track to test 2,500, which would be a milestone.”
Investors started off the week by breathing a sigh of relief after damages from Hurricane Irma appeared to be less than initially expected, while North Korea held off on another nuclear test.
Wall Street also got some hope that tax reform could still happen this year. Treasury Secretary Steven Mnuchin told CNBC on Tuesday that the administration would pass tax reform before 2018.
President Donald Trump, meanwhile, urged Congress to move forward with tax reform, saying on Twitter that “the biggest Tax Cut & Tax Reform package in the history of our country will soon begin. Move fast Congress!”
Tax reform hopes have been one of the main catalysts for the stock market since Trump’s election. In that period, the S&P 500’s market value has increased by more than $2 trillion.
But tax reform expectations have decreased since the election, as the administration has been bogged down by in-party fighting and a failed attempt at overhauling health care, among other factors.
“The mood [in the market] has been positively affected by the prospects of something good coming out” of the Trump administration, said Randy Warren, chief investment officer at Warren Financial. “But at the same time, there isn’t a big premium built into the market because of all the dysfunction in Washington.”
“However, if we can get some tax reform, that would be tremendous for the market,” Warren said.
In economic news, the U.S. Producer Price Index — a measurement of inflation — rose 0.2 percent in August, below the expected 0.3 percent increase.
Source: CNBC
