U.S. Stocks Rise to New Highs, Buoyed by Telecoms and Financial Firms
13 December 2017 - 10:18AM
Dow Jones News
By Michael Wursthorn and David Hodari
-- U.S. stocks rise, led by financials, telecoms
-- European shares move higher, while Asia slides
-- Investors look to central banks
The Dow Jones Industrial Average and the S&P 500 clinched
new records Tuesday, buoyed by shares of banks and other financial
firms.
Bank stocks have been rallying in recent weeks as Republicans in
the House and Senate work to complete a sweeping tax overhaul this
year. Rising government bond yields, which tend to boost bank
profits, gave shares of financial firms an added lift ahead of the
Federal Reserve's expected interest-rate increase on Wednesday.
"Everything right now comes down to policy," said Eric Wiegand,
senior portfolio manager U.S. Bank Private Wealth Management.
"We'll be watching what [Fed Chairwoman Janet] Yellen might say at
her last press conference and any insights going forward. The other
fixation in Washington is on the tax bill," he added, saying that
he and other investors are "looking for any signs of negotiations
advancing."
The Dow industrials rose 118.77 points, or 0.5%, to 24504.80,
while the S&P 500 added 4.12 points, or 0.2%, to 2664.11. It
was the Dow's 67th record close this year, and the S&P 500's
60th. The Nasdaq Composite fell 12.76 points, or 0.2%, to 6862.32,
snapping a four-session winning streak.
Goldman Sachs Group gained $7.55, or 3%, to $257.68, adding
about 52 points to the index and making it the biggest contributor
to the Dow's point gain. JPMorgan Chase & Co. rose 1.23, or
1.2%, to 106.85.
The yield on the benchmark 10-year U.S. Treasury note rose for a
fourth consecutive session to 2.403%, from 2.387% on Monday. Yields
rise as bond prices fall.
Shares of financial stocks in the S&P 500 are up 8.9% so far
this quarter, with much of its gains coming as Republicans have
made progress on their tax proposal to make it the best-performing
sector of the broad index so far.
A mix of corporate news also pushed telecommunications and media
firms higher. The gains among financial and telecom stocks helped
both the Dow and the S&P 500 overcome declines in shares of
technology and energy companies.
Verizon continued to get a boost after it said Monday it struck
a deal to show NFL football games on its mobile network, as well as
Yahoo and its other platforms. Verizon shares climbed 1.35, or
2.6%, to 53.19.
Shares of Comcast advanced 1.07, or 2.8%, to 39.51 after the
cable and programming firm said it was no longer pursuing an
acquisition of media and entertainment assets from 21st Century
Fox.
Meanwhile, Walt Disney's talks to acquire assets from 21st
Century Fox continued and a deal could be announced as soon this
week, The Wall Street Journal reported. Shares of 21st Century Fox,
which shares common ownership with Wall Street Journal parent News
Corp, rose 44 cents, or 1.3%, to 34.10, while Disney gained 60
cents, or 0.6%, to 107.43.
Boeing, a big contributor to the Dow's gains this year, gained
6.78, or 2.4%, to 289.94 after the aerospace giant late Monday said
it would boost its quarterly dividend by 20% and raise its buyback
authorization to $18 billion.
Tuesday marked the start of the Federal Open Market Committee's
two-day meeting, with the panel's interest-rate decision due
Wednesday. Data from CME Group showed investors were betting on a
100% probability that the Fed will announce a rate increase.
Investors shouldn't expect many surprises in the months ahead
from the central bank, said Mark Richards, a global multiasset
strategist at J.P. Morgan Asset & Wealth Management. December's
meeting will be the last for multiple FOMC members, and despite an
impending change at the helm in January, "it doesn't feel like a
new Fed chair will seek to alter the policy path materially, so we
expect [the current guidance of three increases] to be maintained
for a good few months."
Elsewhere, the Stoxx Europe 600 rose 0.7%, while most indexes in
Asia ended the session lower.
Hong Kong's Hang Seng Index fell 0.6%, dragged lower by
heavyweight Tencent Holdings. South Korea's Kospi slipped 0.4%,
while Japan's Nikkei closed 0.3% lower. The Shanghai Composite lost
1.2%.
Write to Michael Wursthorn at Michael.Wursthorn@wsj.com and
David Hodari at David.Hodari@dowjones.com
(END) Dow Jones Newswires
December 12, 2017 18:03 ET (23:03 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.