US stock indexes close at record highs on trade optimism
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Traders work on the floor of the New York Stock Exchange (NYSE) on Nov 04, 2019 in New York City.
PHOTO: AFP
NEW YORK (AFP) - Wall Street stocks surged to fresh records on Monday (Nov 4) on optimism over international trade talks and continued positive momentum from solid economic data and earnings.
The Dow Jones Industrial Average finished at 27,462.11, up 0.4 per cent and about 105 points above the previous all-time high in July.
The broad-based S&P 500 also gained 0.4 per cent, rising to 3,078.27, while the tech-rich Nasdaq Composite Index jumped 0.6 per cent to 8,433.20.
Both the S&P 500 and Nasdaq had ended at records on Friday.
Analysts cited remarks from US Commerce Secretary Wilbur Ross that "phase one" of the trade agreement between Beijing and Washington was on track and hinting that the US may not impose tariffs on car imports from Europe and Japan.
Alan Skrainka, chief investment officer at Cornerstone Wealth Management, said investors are heartened that the United States and China have pulled back from threats of new additional tariffs.
"The idea that it was going to get worse and worse was what investors were most worried about," Skrainka said. "And that is off the table." The records also followed a strong US employment report released Friday and a large number of third-quarter earnings reports in recent weeks that bested analyst expectations.
Positive momentum in stocks has created a "fear of missing out" among investors, said Briefing.com analyst Patrick O'Hare.
Petroleum-linked shares had an especially positive session, with Dow members Exxon Mobil and Chevron and Halliburton all winning at least three per cent.
But another Dow company, McDonald's, dropped 2.8 per cent after the fast-food chain over the weekend ousted CEO Steve Easterbrook over a "consensual relationship" with an employee that violated company policy.
On Monday, McDonald's said its top human resources executive, David Fairhurst, is also exiting the company.
Under Armour plunged 17.9 per cent as it said the US Justice Department and Securities and Exchange Commission are investigating its accounting practices.
The company "continues to believe its accounting practices and related disclosures were appropriate," Under Armour said in a securities filing.
Part of the reason for the big drop was that Under Armour did not previously disclose the probe, which began in 2017, analysts said.