Categories
Headlines

Dow closes above 29,000 as market rally continues

New York Stock Exchange tradersImage copyright
Getty Images

US share market indexes have hit new highs, with the Dow Jones Industrial Average, closing above 29,000 for the first time.

The S&P 500 also closed at a new high, gaining 0.2% to end at 3,289, while the Nasdaq held steady at 9,258.

The gains came as the US and China signed a deal aimed at easing tensions between the two economic giants.

Shares have enjoyed weeks of steady rises, during which markets seemed impervious to bad news.

The three major US indexes rose about 30% in 2019, recording their best year since 2013 despite average earnings growth estimated at a far more modest 1%.

Most analysts are predicting further gains in 2020.

Weak earnings

“The sentiment really has improved,” said Howard Silverblatt, senior index analyst at S&P Dow Jones Indices.

Just a few months ago, fears of a recession were the talk of Wall Street and the Federal Reserve lowered rates in an effort to shore up the US economy.

But in recent weeks, investors have appeared to shrug off confrontation between the US and Iran, as well as weak earnings from a string of retailers, including Target on Wednesday.

US jobs growth slows in December
US and China sign deal to ease trade war

Investors remain largely positive about growth prospects, especially given the low interest rates which typically encourage companies to invest, said Andrew Lo, finance professor at MIT’s Sloan School of Management.

“There’s a lot of reasons to be optimistic,” he said. But, he added it “wouldn’t take a lot to dramatically shift people’s perceptions.”

Outshine

Mr Silverblatt said the Fed’s decision to cut rates drove the rally in the autumn, while relief over the US-China deal also explains some of the gains. Tensions between the US and Iran have appeared to ease since the US strike killing Iranian general Qasem Souleimani.

Stocks also continue to appeal to investors for the simple reason that they continue to outshine other investment options.

“Fear of missing out is a major item,” Mr Silverblatt said. “The nervousness and concern on the street seems like it’s just as high as it has been over the last couple of months.”

Mr Lo concurred: “People don’t have any better places to put that money but at some point … when push comes to shove and there is some significant instability, you will see a tremendous outflow.”

Avatar

By Laura Price

Laura is the senior writer and Smartphones section editor responsible for managing software updates and smartphones section. She is very passionate about Gadgets & Technology and always looking around to use them in an innovative way in daily life. She reviews Gadgets & Applications to tell users about their optimum use to get the most out of in which they’ve put their time and hard earned money.
Email:[email protected]