TORONTO – The Dow Jones industrial average soared above 19,000 points for the first time ever, as North American stock markets continued to ride a wave of optimism triggered by the victory of U.S. president-elect Donald Trump.
All three major stock markets in New York closed at record highs for a second day in a row.
The Dow Jones gained 67.18 points to 19,023.87, while the tech-heavy Nasdaq composite rose 17.49 points to 5,386.35. The broader S&P 500 index advanced 4.76 points to 2,202.94.
Wall Street indices have been buoyed by the prospect of a Trump presidency, interpreting the brash New York billionaire’s surprise election as one that would result in more spending for major infrastructure projects in the U.S.
Companies that deal with materials and construction have seen their stocks rise since the vote. Banks and pharmaceutical firms have also seen similar gains due to Trump’s stance on lessening regulations on these industries.
Norman Levine, the managing director at Portfolio Management Corp., said the markets view the president-elect as someone who is friendly to corporate America.
“The markets, generally, from the limited amount they know about Trump and his economic policies, still feel positive. That’s why you’re getting this continued lift and record highs,” he said.
But what remains to be seen is whether Trump will act on his policies, and if he does, when that will actually happen.
“(Markets) are at risk because we don’t really know what he is going to do and not going to do,” said Levine.
“We know that during an election, politicians promise all kinds of things and don’t necessarily do everything they promise.”
Stock markets are also getting a lift with an anticipated upcoming rate hike from the U.S. Federal Reserve next month. The central bank has recently hinted that it will raise rates from their record lows as it continues to see signs of strength in the U.S. economy.
Most economists now predict the Fed will make a move at its next two-day policy meeting on Dec. 13-14.
Higher interest rates have also helped strengthen shares in banks, which will benefit from doling out loans.
In Toronto, the S&P/TSX composite index climbed 60.51 points at 15,100.38, helped by rising metals and materials stocks.
The Canadian dollar slipped 0.22 of a U.S. cent to 74.33 cents US, as it felt downward pressure from weaker oil prices.
The January crude contract fell 21 cents to US$48.03 per barrel.
December natural gas was up three cents at US$2.98 per mmBTU, while January contracts, which were trading at a similar volume, were up two cents at $3.10 per mmBTU.
The December gold contract gained $1.40 to US$1,211.20 an ounce and December copper contracts were up three cents at US$2.54 a pound.
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