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Dow cruises toward eighth straight record closing high

Posted by: Admin | Posted on: August 4th, 2017 | 0 Comments

(Reuters) – The Dow Jones Industrial Average headed for its eighth straight record high close on Friday, with strong gains in JPMorgan Chase and other banks after data showed U.S. employers hired more workers than expected in July.

The strong jobs report is likely to clear the way for the Federal Reserve to announce a plan to start shrinking its $4.5 trillion bond portfolio in September, and could strengthen its case to raise rates for the third time this year in December.

The Labor Department report showed nonfarm payrolls increased by 209,000 jobs last month, above the 183,000 rise expected by economists polled by Reuters.

With banks standing to benefit from higher interest rates, the SP financial index .SPSY rose 0.6 percent. Goldman Sachs (GS.N) rose 2.1 percent and was the top contributor to the Dow’s gain for the day.

Perceived chances of an interest rate hike by the U.S. central bank by the end of the year increased to 50 percent from 46 percent after the release of the data, according to CME Group’s FedWatch tool.

Analysts, on average, expect SP 500 earnings to have grown 12 percent in the second quarter and they project earnings up 9.3 percent for the September quarter, according to Thomson Reuters I/B/E/S.

The Dow was on track to close at a record high for the ninth straight session.

“We would expect next week to see market highs again just based on the positive tone created by strong second-quarter earnings and favorable outlooks,” said Tim Ghriskey, chief investment officer of Solaris Group. “We’re really in a sweet spot here.”

At 2:36 p.m. (1836 GMT), the Dow Jones Industrial Average .DJI was up 0.18 percent to 22,065.31 and the SP 500 .SPX had gained 0.09 percent to 2,474.33.

The Nasdaq Composite .IXIC added 0.03 percent to 6,342.21.

The SP 500 materials index .SPLRCM rose 0.4 percent, helped by a 0.9-percent rise in Dow Chemical (DOW.N).

The utilities .SPLRCU, healthcare .SPXHC, consumer discretionary .SPLRCD and consumer staples .SPLRCS indexes fell. Gilead’s (GILD.O) 1.9-percent fall and Allergan’s (AGN.N) 2.9-percent loss weighed on the healthcare index.

Walt Disney (DIS.N) fell 1.3 percent and was the biggest drag on the Dow.

Viacom (VIAB.O) slumped 11.6 percent after the company forecast a low single-digit dip in sales.

Yelp (YELP.N) jumped 27.5 percent after the company said it would sell its Eat24 business to Grubhub (GRUB.N) for $287.5 million and reported a better-than-expected quarterly revenue. Grubhub rose 9.7 percent.

(This version of the story corrects headline and story to show Dow on track for its eighth straight record close, not ninth)

Additional reporting by Melissa Wen in San Francisco and Tanya Agrawal in Bengaluru; Editing by James Dalgleish

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