Dow hits record high as markets ride on Trump win, healthcare, financial lead Wall St higher

Traders work on the floor of the New York Stock Exchange the morning after Donald Trump won the US presidential election.
Traders work on the floor of the New York Stock Exchange the morning after Donald Trump won the US presidential election. PHOTO: AFP

NEW YORK (REUTERS) - The Dow Jones industrial average hit a record intraday high on Thursday as investors bet that President-elect Donald Trump would lead a shift away from austerity policies.

Investors are seeing Mr Trump's policies such as higher defense and infrastructure spending, tax cuts and deregulation of banks as being more business-friendly than Democrat Hillary Clinton's position of maintaining status quo.

"The markets are adjusting to a new reality and are giving Trump the benefit of doubt," said Adam Sarhan, chief executive officer of Sarhan Capital. "He does have some problems with immigration and with social issues, but his economic policies, at least in the short-term, are perceived to be stimulative and net good for the economy and that's why stocks are rallying."

The dollar jumped to a more than two-week high of 98.92, while gold turned flat as investors returned to riskier assets such as stocks.

The Mexican peso continued its downward momentum against the dollar as Mr Trump's policies are considered deeply negative for the country.

At 9:43 a.m. ET (10.43 p.m Singapore time) the Dow Jones industrial average was up 161.69 points, or 0.87 per cent, at 18,751.38. The S&P 500 was up 17.11 points, or 0.79 per cent, at 2,180.37. The index is less than 20 points shy of its record intraday high. The Nasdaq Composite index was up 45.40 points, or 0.86 per cent, at 5,296.47.

Financial and healthcare stocks rose, continuing to hold their positions as the top performers among the 11 major S&P 500 sectors in the post-Trump victory rally.

Consumer staples, utilities and real-estate - the defensive parts of the market - remained the big losers.

As investors decipher what a Trump presidency would mean to the financial markets, St. Louis Federal Reserve President James Bullard repeated his call that a single interest rate increase would be adequate for the foreseeable future.

Macy's rose 6.4 per cent to US$40.85 after the department store operator raised its full-year sales forecast and announced a partnership to monetize some of its real-estate assets. Shares of drugmakers such as Merck, Celgene and Gilead rose on Trump's victory and after California voters turned down a ballot initiative aimed at reining in rising prices for prescription drugs.

IBM provided the biggest boost to the S&P and the Dow, rising 2.7 per cent to US$159.02 after Bank of America Merrill Lynch upgraded the technology services provider's stock and raised its price target. Walt Disney and Nordstrom are expected to report earnings after market closes. Advancing issues outnumbered decliners on the NYSE by 1,725 to 1,049. On the Nasdaq, 1,756 issues rose and 648 fell.

The S&P 500 index showed 70 new 52-week highs and three new lows, while the Nasdaq recorded 221 new highs and 14 new lows.