Technology shares lead the charge
US stocks rallied to new records on Wednesday, 17 January 2018 with technology shares leading the charge. On Tuesday, it traded above 26,000 but ended down by less than 0.1% after its intraday gain of more than 200 points failed to stick, marking the largest one-day reversal since February 2016. On Wednesday, the Dow crossed the 26,000 mark.
The Dow Jones Industrial Average jumped 322.79 points, or 1.3%, to 26,115.65. The Nasdaq Composite Index rose 74.59 points, or 1%, to 7,298.28. The S&P 500 rose 26.14 points, or 0.9%, to 2,802.56.
Right behind technology in the sector standings were the consumer staples and health care groups. General Electric weighed heavily on the industrial group, dropping 4.7%, as investors continued selling in reaction to Tuesday's announcement that GE's reinsurance business will incur a larger-than-expected charge of $6.2 billion.
Meanwhile, the financial sector finished roughly in line with the broader market following fourth quarter earnings from Bank of America, Goldman Sachs, U.S. Bancorp and Charles Schwab. All four companies beat earnings estimates.
In other corporate news, Ford tumbled 7.0% after announcing that it expects lower operating profits in 2018, and Boeing jumped 4.7% to a new all-time high after announcing a joint venture with Adient to develop, manufacture, and sell a portfolio of seating products to airlines and aircraft leasing companies. Adient shares finished lower by 5.9%.
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In the bond market, U.S. Treasuries sold off in the midweek session, sending yields higher across the curve. The yield on the benchmark 10-yr Treasury note finished at 2.57% after closing Tuesday at 2.54% while the 2-yr yield jumped four basis points to 2.05%.
The dollar pulled back after earlier strength, with its leading index hitting another three-year low on Wednesday. The greenback has been sapped in recent sessions, in part as the euro was driven higher on expectations the European Central Bank will soon adopt a hawkish tone toward monetary policy if the eurozone economy continues to strengthen. The ECB will meet on Jan. 25.
A weaker dollar can boost the appeal of commodities as an investment, as most commodities are priced in dollars.
U.S. economic data showed that industrial production rose 0.9% in Decembera fourth straight monthly increase, but home builder confidence has lost steam this month. The mixed data offered few clues on the aggressiveness of Fed rate hikes this year. Gold has remained relatively strong against the backdrop of three U.S. interest-rate hikes in 2017.
On Wednesday, the Federal Reserve's Beige Book, which offers a deep dive on economic activity said the pace of growth continues to be modest to moderate. The report comes ahead of the Fed's next monetary policy meeting, during which the central bank is expected to keep short-term interest rates steady.
Bullion prices ended mixed at Comex on Wednesday, 17 January 2018. Gold futures notched a fifth session gain and another four-month high on Wednesday, with the dollar-denominated yellow metal getting a boost as the U.S. dollar failed to see much of a bounce back from recent lows. Prices for the yellow metal eased back a bit from the settlement shortly after the release of the Federal Reserve's Beige Book. Silver prices slipped.
February gold rose $2.10, or nearly 0.2%, to settle at $1,339.20 an ouncethe highest since 8 September 2018. Gold last week tallied a fifth week of consecutive gains, the longest such stretch since April. Month to date, the metal has climbed more than 2%. In electronic trading, prices pulled back to $1,338.10. March silver fell 0.1% to settle at $17.166 an ounce.
Crude oil futures settled higher on Wednesday, 17 January 2018. Prices were buoyed by expectations for a ninth straight weekly drop in U.S. crude supplies and risks to production in Nigeria. Traders awaited weekly U.S. government data on domestic crude supplies and production, as well as separate, monthly global energy reports due later this week.
February West Texas Intermediate oil added 24 cents, or 0.4%, to settle at $63.97 a barrel on the New York Mercantile Exchange. Brent crude for March, the global oil benchmark, rose 23 cents, or 0.3% to $69.38 a barrel on London's ICE Futures exchange.
There are growing concerns that the higher crude prices, which have touched their highest levels since late 2014, may stimulate increased shale oil production from the U.S., which is not part of the output-cut agreement lead by the Organization of the Petroleum Exporting Countries. On Thursday, investors will receive several economic reports, including Housing Starts for December (consensus 1280K), Building Permits for December (consensus 1290K), weekly Initial Claims (consensus 251K), and the Philadelphia Fed Index for January (consensus 24.5). All data will be released at 8:30 AM ET.
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