The Dow Jones Industrial Average (DJIA) gained 30.71 points to close at 22,871.72. During the day, it reached an all-time high of 22, 905. 33 but was unable to hold on to it. Big gainers were American Express up 1.36 percent and MacDonald’s up 0.89 percent.
The S & P 500(SPX) was up a meagre 2.24 points and closed at 2,553.17 falling back from an intraday record of 2,557.65. The largest gains were in materials and technology both up 0.5 percent. The Nasdaq composite climbed 14.29 points to 6,605.80. The index includes many technology stocks a group that gained considerably on the day. This is the 57th record the Nasdaq has set for this year.
Over the week, gains were modest with the DJIA gaining 0.4 percent, the SPX a 0.2 rise. Both have risen now for five consecutive weeks. The Nasdaq advanced 0.2 percent marking its third consecutive weekly advance. The yearly gains for the three indices are: DJIA, 15.7 percent; SPX 14 percent; and Nasdaq about 23 percent.
Good earnings from banks and the highest consumer-sentiment in 13 years helped keep the market in positive territory. Trump’s announcement that he would not certify Iranian compliance with the multi-nation 2015 nuclear agreement and his plan to impose more sanctions on Iran did not cause any visible negative effect on the market even though this may strain relations of the US with several EU nations that are part of the agreement.
Another move by Trump that ended billions of dollars in subsidies to insurers under the Affordable Care Act had a negative effect on some health care stocks. Trump usually tweets praise of stock market gains but on the health insurance subsidies he said: ” Health Insurance stocks, which have gone through the roof during the ObamaCare years, plunged yesterday after I ended their Dems windfall! ”
The consumer-price index rose 0.5 percent last month, the largest increase in 8 months but still below that of a poll of economists who had predicted a larger 0.6 rise. If food and energy costs are removed the index rose at a mere 0.1 percentage rate. Retail sales were booming with a rise of 1.6 percent in September, the largest hike in 2.5 years. The University of MIchigan reading of the consumer-sentiment index was 101.1 the highest level since 2004.
The Volatility Index (VIX) was below ten, at 9.61, around historic lows. Randy Frederick of the Schwab Center for Financial Research said:“There’s no reason to sell. Just sit and watch your stuff go up and that’s why trading volumes are low.”
Among other shares that did well were Netflix which closed 1.9 percent higher. Apple was also up 0.6 percent helping the S & P 500 stay in positive territory. Bucky Hellwig, senior vice-president at BB&T Wealth Management said:“We’re seeing a continuation of the strength in the market combined with low volatility. There seems to be money searching for stocks and looking for investments, simply because the momentum is still positive. Also we’re entering a seasonal period where it’s difficult to fight the tape. So I imagine there’s cash coming in off the sidelines.”
