Wall Street surrenders gains after Trump talks up dollar
The Dow Jones Industrial Average hit a record high on Thursday although much of Wall Street relinquished earlier gains after President Donald Trump said he wants a strong dollar.
The U.S. currency <.dxy> regained losses against a basket of major currencies after Trump told CNBC in an interview in Davos, Switzerland that he wants to see a strong dollar.
The currency had suffered its biggest daily percentage drop in seven months on Wednesday after U.S. Treasury Secretary Steven Mnuchin said he welcomed a weaker currency. A weaker dollar tends to benefit large U.S. multinational companies.
Shares of Caterpillar Inc
"If growth continues the way we expect, we should see a rotation out of these mega cap tech companies and into more of the higher-leveraged value companies," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.
"And Caterpillar is it."
Robust quarterly earnings and economic data have given Wall Street a strong start to 2018, with the three major indexes up more than 6 percent year to date.
But the market`s relentless rise over the past year has some investors worried about a correction.
"It`s a market that ignores all bad news and thrives on good news. It`s scary. The correction is going to be cruel, cold and brutal when it happens," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
S&P 500 companies on average are expected to have increased their fourth-quarter earnings by 12.7 percent, according to Thomson Reuters I/B/E/S.
Of the 118 S&P 500 companies that have already posted results, 78.8 percent have topped expectations, versus an average of 72 percent over the previous four quarters.
The Dow Jones Industrial Average <.dji> rose 95.16 points, or 0.36 percent, to 26,347.28, the S&P 500 <.spx> gained 0.02 points to 2,837.56 and the Nasdaq Composite <.ixic> added 0.38 points, or 0.01 percent, to 7,415.44.
Weekly initial jobless claims indicated the labour market continues to tighten. However, sales of new U.S. single-family homes fell more than expected in December, recording their biggest drop in nearly 1-1/2 years.
Ford Motor Co
After the close of trading on Thursday, results are expected from Intel Corp
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
Get Latest Business News, Stock Market Updates and Videos; Check your tax outgo through Income Tax Calculator and save money through our Personal Finance coverage. Check Business Breaking News Live on Zee Business Twitter and Facebook. Subscribe on YouTube.