Dow closes above 23,000 for first time; IBM soars
By Caroline Valetkevitch
NEW YORK (Reuters) – The Dow Jones Industrial Average closed above 23,000 for the first time on Wednesday, driven by a jump in IBM after it hinted at a return to revenue growth.
The Dow hit 22,000 on Aug. 2, only 54 trading days earlier and roughly half the time it took the index to move from 21,000 to 22,000. This marks the fourth time this year the Dow has reached a 1,000-point milestone.
“Retail investors continue to pour into the marketplace, and with each headline about a new record, and especially round numbers like that, people tend to feel like they’re missing out and you kind of suck more people into the market,” said Ian Winer, head of equities at Wedbush Securities in Los Angeles.
“Ultimately, the only way you’re going to top is by getting everybody all in. And we’re getting close.”
Investors globally pulled $33.7 billion from U.S. equity funds during the third quarter, according to Thomson Reuters’ Lipper research unit. The funds are on course to post net outflows for the full year.
Shares of IBM (N:IBM), which beat expectations on revenue, jumped 8.9 percent and accounted for about 90 points of the day’s 160 point-gain in the blue-chip index.
Solid earnings, stronger economic growth and hopes that President Donald Trump may be able to make progress on tax cuts have helped the market rally this year.
The S&P 500 and Nasdaq also hit record closing highs.
The Dow Jones Industrial Average (DJI) rose 160.16 points, or 0.7 percent, to end at 23,157.6, the S&P 500 (SPX) gained 1.9 points, or 0.07 percent, to 2,561.26 and the Nasdaq Composite (IXIC) added 0.56 point, or 0.01 percent, to 6,624.22.
“Today the catalyst is clearly IBM … which appears to have turned the corner. It gave the Dow the boost to stay over 23,000,” said Quincy Krosby, chief market strategist at Prudential Financial (NYSE:PRU) in Newark, New Jersey.
The Dow had briefly surpassed the all-time peak on Tuesday but closed just shy of it.
The financial index (SPSY) jumped 0.6 percent, led by bank stocks recovering from recent post-earnings losses. Bullish calls by brokerages helped to support the bank shares.
Bank shares had run up ahead of recent results, which resulted in some selling following the news, Krosby said.
Investors await news on Trump’s decision on the Federal Reserve chair position. The White House said Wednesday Trump will announce his decision in the “coming days.”
Abbott (N:ABT) rose 1.3 percent after the company’s profit beat estimates on strong sales in its medical devices business.
After the bell, shares of eBay (O:EBAY) fell 4 percent following its results.
Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favored advancers.
About 5.6 billion shares changed hands on U.S. exchanges, below the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.