Dow closes above 23,000 as IBM surges
The Dow surged past 23,000 Wednesday and closed above the milestone for the first time.
The Dow Jones Industrial Average gained 160 points, or 0.7%, to 23,157.60. The S&P 500 and Nasdaq Composite also hit new all-time highs. The S&P 500 rose 1.9 points, or 0.07%, to 2,561.26. The Nasdaq ticked 0.56 points higher, or 0.01%, to 6,624.22.
The blue-chip index briefly traded above 23,000 on Tuesday but fell short of the milestone at the end of the session. With stocks routinely posting new records, the Dow has reached four 1,000-point milestones in 2017. It also has 51 record closes to its credit.
IBM (NYSE:IBM) powered the Dow in its Wednesday run. The tech giant rallied about 8.9% after topping Wall Street’s estimates for third-quarter earnings.
The market’s surge has ignited some jitters on Wall Street, as investors begin to grow wary of a potential pullback. Scott Wren, senior global equity strategist for Wells Fargo Investment Institute, noted on Tuesday that the Dow’s move to 23,000 was “another confirmation that valuations are getting stretched.” Still, stocks continue to march higher, and analysts believe the bull market isn’t quite done.
“If you look at revenue and earnings opportunities in the future, taking into account growth around the world, it’s also easy to see why investors would want to pay up,” said Jamie Cox, managing partner at Harris Financial Group. “I don’t think there’s much in the way of major market surprises that we should be worried about at this moment.”
Cox noted that robust corporate earnings and optimism over the U.S. economy have fueled the market’s run, and economic headwinds have been isolated to certain sectors such as retail.
“That is the sign of a healthy market,” he said.
In corporate news, health-care stocks climbed after Anthem (NYSE::ANTM) announced the launch of a pharmacy-benefit manager in a partnership with CVS Health (NYSE:CVS). Anthem rose 2.4%, while CVS Health gained 2%.
Morgan Stanley (NYSE:MS) advanced 2.1%, and Goldman Sachs (NYSE:GS) jumped 2.5% a day after the investment banks revealed stronger earnings than expected.
Traders also got a glimpse of the Federal Reserve’s economic view. In its beige book, the central bank said all 12 districts saw improved economic activity in September through early October. Businesses also reported an increase in new-vehicle sales and tourism, while retail spending rose slowly.
“Increasing earnings, restrained inflation, an accommodative Fed and constructive technical trend lines provide valuation support and the basis for stocks to trend higher,” U.S. Bank Wealth Management wrote in a note to clients.
The yield on the 10-year Treasury bond rose to 2.34% from 2.30%.
U.S. oil futures added 16 cents to settle at $52.04 per barrel. Brent crude, the international benchmark, was trading 31 cents higher at $58.19 per barrel.