The Dow Jones Industrial Average rose slightly to another record close Tuesday as investors assessed new economic data and developments between the U.S. and China on trade.
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The 30-stock gauge gained about 30 points in its third straight positive day. Nasdaq was little changed, weighed down by a 1.6% loss in Netflix shares. The S&P 500 fell 0.1% as underperformance in the real estate and utilities sectors capped gains in the broad market.
Dow component Boeing gained 2.6% after the company said the CEO will forgo bonuses this year amid the 737 Max crisis.
Strong earnings, more promising economic data and trade progress drove the Dow to an all-time high Monday, following the S&P 500 and Nasdaq’s new records reached last week.
“You always get a little vertigo at all-time highs and you’re getting a little bit of that today,” said Art Hogan, a chief market strategist at National Securities.
Investors remained on edge about a potential U.S.-China trade deal. China is pushing President Donald Trump to remove more tariffs on about $125 billion worth of Chinese goods imposed in September as part of the “phase one” trade deal, reports said. “Firmer commitments on lifting tariffs” are needed for China to pay a visit to the U.S., according to the South China Morning Post.
“It’s encouraging but we are eyeing it skeptically,” said Mike Loewengart, the vice president of investment strategy at ETrade Financial. “We would caution investors to not pin all their hopes for a phase one deal coming into fruition in the weeks ahead.”
The two sides are picking a new location for the deal signing after the original meeting in mid-November was canceled for unrelated reasons. China said Friday it has reached a consensus with the U.S. in principle after talks last week.
Better-than-expected economic data prevented the market from falling further. A gauge for U.S. services activities topped expectations for October. The ISM nonmanufacturing index came in at 54.7, compared with a 53.5 estimate forecast by economists polled by Dow Jones.
The financial sector was the best-performing group among 11 S&P 500 sectors as yields continued to rise on trade-deal hopes. Bank of America was up 1.6%, while J.P. Morgan rose 0.8%.
The Dow’s year-to-date gain now stands at around 18% after a rally of 3.4% in the past month. The S&P 500 is up more than 22% this year after surging 4.3% in the past month.
The corporate earnings season has been better than expected as 75% of the S&P 500 companies that have reported topped analyst expectations, FactSet data shows. Adobe surged 5% after the software company issued better-than-expected guidance for fiscal year 2020.
The U.S. trade deficit with its global partners contracted to $52.5 billion in September as the U.S. and China worked towards a tariff truce, according to a Commerce Department report Tuesday.
Shares of Walgreens Boots Alliance rose more than 7% on reports the company has been exploring a deal to go private.
CNBC’s Elliot Smith and Fred Imbert contributed to this report.
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November 06, 2019 at 04:10AM
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Dow posts another record close on strong economic data The Dow Jones Industrial Average rose slightly - msnNOW
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