EDITOR’S NOE: Sam Collins will return on Feb. 21.
On Tuesday, both the Dow Jones Industrial Average and the Nasdaq Composite rose to new all-time intraday highs, climbing to 20,155.35 and 5,689.60, respectively.
The Dow Jones was driven higher in large part by the bullish gains on both International Business Machines Corp. (NYSE:IBM), up 1.48%, Boeing Co (NYSE:BA), up 1.54%, and Apple Inc. (NASDAQ:AAPL), up 0.95%, the second, fourth and seventh most expensive stocks in this price-weighted index.
In fact, nine out of the top 10 most expensive stocks in the Dow Jones saw price gains, with the Goldman Sachs Group Inc (NYSE:GS), down 0.15%, being the only one to fall as enthusiasm for financial stocks pauses.
Apple, Alphabet Inc (NASDAQ:GOOGL, NASDAQ:GOOG), up 0.93%, and Amazon.com, Inc. (NASDAQ:AMZN), up 0.6%, did most of the heavy lifting to push the NASDAQ up to new highs.
While technology and consumer staples stocks did well, energy stocks did not. Halliburton Company (NYSE:HAL), down 2.17%, Anadarko Petroleum Corporation (NYSE:APC), down 2.84%, and Pioneer Natural Resources (NYSE:PXD), down 3.39%, were some of the biggest losers on the day.
U.S. crude oil prices dropped by 1.6% to $52.17 a barrel as the Energy Information Administration (EIA) predicts U.S. crude oil output will rise to its highest level — 9.53 million barrels per day — in nearly 40 years during 2018.
Political uncertainty in Europe helped push the U.S. dollar higher and U.S. Treasury yields lower as international investors seek a safe haven for a portion of their portfolios. The Bloomberg Dollar Spot Index rose 0.4% and the yield on the 10-year Treasury fell to 2.39% as French far-right candidate Marine Le Pen gains in popularity and continues to call for the removal of France from the euro and polls tighten in Germany, putting Angela Merkel’s reelection chances on less-stable footing.
Meanwhile, the CBOE Volatility Index (VIX) remains in a downward-trending channel just above 11 — indicating traders on Wall Street are confident the S&P 500 is going to be able to hold onto its gains in the near future.
Conclusion: While there are certainly potential bearish risks facing the market, it is difficult to argue with a bullish market that continues to create new all-time intraday highs. We’re half way through earnings season, and according to Factset, 65% of the S&P 500 components that have reported earnings have beat EPS estimates. While this is slightly below average, it appears traders are still looking ahead to the promise of greater profits if the Donald Trump administration pulls through on its promises to reform the tax code and boost the economy with infrastructure spending.
Today’s Trading Landscape (Heading 3)
To see a list of the companies reporting earnings today, click here.
For a list of this week’s economic reports due out, click here.
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