US: Wall Street extends record run as "Trump trade" reignites

[BENGALURU] The main US stock indexes hit record intraday highs on Monday, led by financials and industrials, as the so-called "Trump trade" sparked back to life on renewed optimism about the economy.

The three main indexes closed at record highs on Thursday and Friday rose after President Donald Trump vowed to make a major tax announcement in the next few weeks.

The S&P 500 has surged 8.3 per cent since Mr Trump's Nov 8 election through Friday's close, fuelled by expectations he will lower corporate taxes, reduce regulations and increase infrastructure spending.

While the rally had stalled amid concerns over Trump's protectionist stance and lack of clarity on policy reforms, the S&P 500 has not dropped more than one per cent in 84 trading days, indicating investors were giving Mr Trump the benefit of doubt.

Investors were also comforted by the two-day US-Japan summit held over the weekend apparently having ended smoothly without Mr Trump talking tough on trade, currency and security issues.

The Japanese yen, the demand for which rises when risk appetite falls, was the biggest underperformer among major currencies. World stocks rose, with Asian shares rallying to a 1-1/2-year high.

Global markets are following the leader (US stocks) after the resurgence of the "Trump trade", Peter Cardillo, chief market economist at First Standard Financial wrote in a note.

At 9.38am EDT the Dow Jones Industrial Average was up 91.51 points, or 0.45 per cent, at 20,360.88.

The S&P 500 was up 7.44 points, or 0.32 per cent, at 2,323.54 and the Nasdaq Composite was up 23.61 points, or 0.41 per cent, at 5,757.73.

Six of the 11 major S&P sectors were higher, with financials and industrials gaining the most. The two sectors are seen benefiting the most from Mr Trump's policies.

Telecom stocks were down the most, 1.4 per cent, due to a 1.3 per cent drop in Verizon after the network carrier said it would reintroduce its unlimited data plan.

Fears of a price war hit other carriers. AT&T was down 1.4 per cent, T-Mobile dropped three per cent, Sprint fell 0.4 per cent.

Apple was the top stock on the S&P and the Nasdaq, rising one per cent and closing on its record high after Goldman Sachs raised its price target on the stock.

Zeltiq Aesthetics surged 12.5 per cent to US$55.60 after Allergan said it would buy the medical device maker for about US$2.48 billion. Allergan's stock was slightly higher.

Chemours rose 14 per cent after the company and DuPont said they had agreed to pay about US$671 million in cash to settle several lawsuits related to the leak of a toxic chemical. DuPont's stock was up 0.5 per cent.

Advancing issues outnumbered decliners on the NYSE by 1,987 to 691. On the Nasdaq, 1,784 issues rose and 623 fell.

The S&P 500 index showed 44 new 52-week highs and no new lows, while the Nasdaq recorded 94 new highs and six new lows.

REUTERS