Dow Jones And S&P 500 Return to Record Highs, Indicators Of Strong U.S. Economy
Vittorio Hernandez | | Nov 21, 2014 02:12 AM EST |
(Photo : Reuters) A screen displays news on the Dow Jones Industrial Average just after the opening bell on the floor of the New York Stock Exchange October 15, 2014. U.S. stocks opened sharply lower on Wednesday as economic data reinforced concerns about the health of the world economy and that corporate merger activity may be slowing. REUTERS/Brendan McDermid (UNITED STATES - Tags: BUSINESS)
The Dow Jones added 33.27 points or 0.2 percent on Thursday, hiking the Dow to 17,719, the second time it broke a record this week after it registered 17,687.82 on Tuesday. Reckoned from January, the Dow has gone up 6.9 percent in 2014.
Not to be outdone, the S&P 500 Index increased by 4.03 points, also a 0.2 percent growth, bringing the index to 2,052.75. It's the third time this week for the S&P to log record-high closes, bringing its growth from the start of the year to 11.1 percent.
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These numbers are indicators not only of earnings higher than analysts' expectations but also are signs that the U.S. economy is strong enough that it could withstand a slowdown in the global economy, market observers stated. In contrast, Europe and Asia are moving in the opposite direction as the euro area's purchasing managers' index for factories and services tumbled down in November to its lowest level in 16 months. On Friday, Markit Economics reported that China's measure of factory health also hit a six-month low for this month, according to Bloomberg.
The record-high Dow and S&P 500 Index were partly driven by corporate earnings as 79 percent of publicly listed firms that reported earnings beat their profit estimate, while 80 percent exceeded their revenue projections. The companies with impressive results were led by Dollar Tree, Best Buy and Urban Outfitters.
Dollar Tree shares increased 5.2 percent to $65.87, Best Buy added 7 percent to $38.02 and Urban Outfitters grew 7 percent to $31.61.
Doug Cote, chief market strategist of Voya Investment Management, said the all-time high for Q3 earnings of companies in the S&P 500 is a signal for investors that the markets' fundamentals are solid. He also noted the good results for housing and jobs market, reports Associated Press.
Paul Zemsky, head of multi-asset strategies at Voya, said that while there are concerns over numbers out of Europe and China's softness, "The swing from this morning was powerful that shows you there's strength and the data is quieting market fears about growth."
TagsDow Jones, S&P, stock market, US economy
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