Wall Street rallies to record highs as data points to strengthening US economy
Following a relatively calm start to the day, major equity indexes in the U.S. gained traction and advanced to new record highs as today's macroeconomic data suggested that the economic growth preserved its momentum despite hurricanes Irma and Harvey.
Today's data showed that initial jobless claims fell more than expected in the week ending September 30 while the trade deficit contracted from $43.6 billion in July to $42.4 billion in August. Moreover, new orders for manufactured goods in the U.S. increased by 1.2% on a monthly basis in August following a 0.2% increase in July.
Meanwhile, bank shares recorded sharp gains after the Senate on Thursday voted to confirm Randal K. Quarles, who is known for his efforts to ease regulation, as the Federal Reserve’s vice chairman for supervision. The S&P financial index .SPSY became the top performing sector as it added 1.1%. Moreover, the S&P information technology index .SPLRCT gained nearly 1% led by a 5% rise in Netflix shares following the company's announcement of a subscription fee markup.
Commenting on today's price action, "People aren’t really selling while we’re at new highs. They’re trying to hang on to what they hold, so it’s a little easier to keep making incremental gains. Stocks also are benefiting from a move into riskier assets on Thursday," Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut, told Reuters.
The Dow Jones Industrial Average gained 112.06 points, or 0.49%, to 22,773.80, the S&P SPX added 14.44 points, or 0.57%, to 2,552.18 and the Nasdaq Composite rose 50.52 points, or 0.66%, to 6,585.14.
DJI technical outlook
Valeria Bednarik, Chief Analyst at FXStreet, writes, "according to the 4 hours chart, the risk is also towards the upside, as technical indicators have barely decelerated on their way up, with the RSI now consolidating at 86, as the index continues developing far above bullish moving averages. The 20 SMA in this last time frame now stands around 22,645, where the index consolidated earlier this week before resuming its advance, making of the level a key support in the case of a downward corrective move."
According to the analyst, supports could be seen at 22,756, 22,698 and 22,645 while resistances align at 22,790, 22,850 and 22,900.
Headlines from the NA session
- Market wrap: dollar up 0.6% - Westpac
- World Bank raised China's growth outlook - UOB
- WTI extends recovery above $51 on OPEC deal extension expectations
- US Factory Orders: Signs of manufacturing strength - Wells Fargo
- US Trade Deficit: Stronger global growth and a weaker dollar - Wells Fargo
- US: Goods & services deficit was $42.4 bln in Aug, down $1.2 billion from $43.6 billion in July
- US: Weekly initial claims was 260,000, a decrease of 12,000 from previous week
- Fed’s Harker: Penciled in 3rd hike in December - CNBC
- Fed's Williams: Expects gradual rate hikes
- NFP Preview: Hurricanes likely pulled down jobs growth - Danske Bank