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US: Dow, S&P set records after Republicans sweep US vote
[NEW YORK] The Dow and S&P 500 Wednesday closed at fresh record highs after Tuesday's elections swept Republicans into power in both houses of Congress and lifted hopes for pro-business policies.
The Dow Jones Industrial Average jumped 100.69 points (0.58 per cent) to 17,484.53, about 95 points above the previous record. The S&P 500 gained 11.47 (0.57 per cent) at 2,023.57.
The tech-rich Nasdaq Composite Index dipped 2.91 (0.06 per cent) to 4,620.72.
Jack Ablin, chief investment officer at BMO Private Bank, said investors were hopeful the elections would boost the prospects for tax reform, the Keystone oil pipeline and immigration reform, among other issues.
"We're seeing some conciliatory remarks from (President Barack) Obama," Ablin said. "Perhaps we'll have some kind of detente with the Republicans." Fresh private economic data was firm. Payroll company ADP said the US private sector added 230,000 jobs in October, above the 220,000 projected by analysts.
The Institute for Supply Management's purchasing managers index in the US services sector fell modestly to 57.1 in October from 58.6 in September, but growth remained well above the 50 reading that indicates expansion Petroleum stocks gained on higher oil prices. Dow member Chevron rose 1.4 per cent, Apache advanced 1.8 per cent and oil services company Halliburton put on 2.3 per cent.
EOG Resources surged 6.5 per cent after reporting that third-quarter earnings more than doubled to US$1.1 billion. The exploration and production company also boosted its oil-production forecast for 2014.
Banking stocks rose, including Dow member JPMorgan Chase (+1.5 per cent), Bank of America (+0.8 per cent) and Citigroup (+1.6 per cent).
Third-quarter earnings continued to flow in, with shares of cookie and chocolates maker Mondelez International adding 6.1 per cent after it reported a 32.5 per cent gain in adjusted profits and raised its outlook for the current period.
Leading online travel website TripAdvisor reported a fall in third-quarter net income despite strong revenue gains, sending its shares diving 14.1 per cent.
Twenty-First Century Fox advanced 4.5 per cent as net earnings of 48 US cents per share bested expectations by 12 US cents due to strong box-office sales and cable subscriptions.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.35 per cent from 2.34 per cent Tuesday, while the 30-year advanced to 3.07 per cent from 3.05 per cent. Bond prices and yields move inversely.