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article imageDow Jones hits record high for 11th straight session

By Ken Hanly     Feb 24, 2017 in Business
At the end of the week the key Dow Jones Index(DJI) of stocks in the United States closed up for the eleventh day in a row. In Canada, however, the S&P/ TSX plunged almost 250 points.
The record high of the DJI was reached only in a rally during the last half-hour of trading as the market recovered from losses earlier in the session. This is the longest streak of records for the DJI since back in 1987. In spite of all the turmoil on the political scene and uncertainty about Trump policies investors see the situation overall as positive for business. Many expect more pro-business news as Trump speaks to the U.S. congress next week.
The Dow Jones Index was up slightly — 11.44 points to 2,0821.76. The S&P also rose marginally by 3.57 points to 2,367.34. The Nasdaq rose 9.80 points to 5.445.31. In sharp contrast, the S&P/TSX index lost a whopping 247.73 points. In a sign that some investors are turning to gold as a safe haven, it rose $6 dollars an ounce to $1,260.60. Silver also rallied with its longest run of weekly gains since 2006.
Stephen Wood, of Russell Investments in New York said by telephone: “Markets are pricing in the Trump agenda and they’re pricing in lot of high expectations. The likelihood that there are going to be some legislative and political bumps on the road is certainly very high. A rally predicated on political policy can expect some volatility within it.’’ In his address to Congress on Tuesday, Trump is expected to set out his plans for tax and health care reform as well as for infrastructure spending.
Researchers including Michael Gapen chief U.S. economist at Barclays Plc said: “There have been some hints about the type of corporate income tax reform that the administration might deliver – a broadening of the base and cuts to the tax rates – markets are still waiting for the 2017 key draft fiscal budget. We think that the presentation to Congress will be a good opportunity for the president to more clearly flesh out his policy priorities and goals, especially on trade, taxes, and public investment.” A BNN article suggests that a "reset" should be expected as Trump outlines his future plans.
The Toronto decline was the most in the last five months. While the loss for the day was 1.57 percent on the shortened week it lost a total of 1.9 percent. There were sharp falls in the energy and financial sectors which are heavily-weighted on the S&P/TSK index. The loss erased two-thirds of this year's rally. The loss was caused in part by disappointing earnings as well as in lack of dividend increases. Oil prices also weakened and there was some trepidation that Trump might impose border taxes.
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