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Dow index breaks historic mark

October 17, 2017

The US blue-chip stock market index has breached the 23,000-mark for the first time in history, powered by strong earnings and continuing its bull run in the wake of Donald Trump's tax cut announcements.

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Wall Street
Image: picture-alliance/AP Photo/R. Drew

The Dow Jones Industrial Average was briefly hitting the 23,000 mark on Tuesday, after surpassing four similar 1,000-point milestones this year and indicating investor faith in the bull-run despite lofty stock valuations. However, the blue-chip US stocks index was lifted above the historic mark with only eight of its 30 components making gains. The two biggest of them were Johnson & Johnson, up 2.2 percent and United Healthcare, which surged 4.9 percent.

If the Dow closes above 23,000, it would be the index's fourth-shortest gallop between thousand-point milestones in its more than 100-year history. It took the index 107 trading sessions from its first close above 21,000 on March 21 to 22,000 but only 24 sessions to move from 20,000 to 21,000 earlier this year, tied for the shortest such span in its history.

"There was some good earnings, real good economic data in spite of the hurricanes," said Peter Cardillo, chief market economist at First Standard Financial in New York. "We're not seeing a market that's galloping along here. The market from a technical perspective is tired. What you're seeing is some hesitancy but not any major declines."

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US stocks have broken numerous records since US President Donald Trump last month released an outline of his tax cut plan. Other key factors behind the boom include relatively low interest rates and solid earnings.

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Still, analysts are cautious about Wall Street's ability to rise further in the coming weeks. A note last week from Wells Fargo Investment Institute predicted the broader-based S&P 500 would experience a "modest pullback" by the end of the year. US investment bank Goldman Sachs said the trajectory would depend on the fate of the tax cut plan.

Donald Trump opened a news conference with Greek Prime Minister Alexis Tsipras by noting the index's achievement: "It broke for the first time ever 23,000. So, we're very happy about that," he told reporters.

uhe/bb (Reuters, AFP)