Dow climbs above 25,000 for first time; TSX hits record high
Posted January 4, 2018 10:05 am.
Last Updated January 4, 2018 9:46 pm.
This article is more than 5 years old.
The Dow Jones industrial average burst through the 25,000 point mark Thursday, just five weeks after its first close above 24,000.
The Dow passed five 1,000-point barriers in 2017 on its way to a 25 per cent gain for the year, as an eight-year rally since the Great Recession continued to confound skeptics.
Strong global economic growth and good prospects for higher company earnings have analysts predicting more gains, although the market may not stay as calm as it has been recently.
The Dow has made a rapid trip from 24,000 points on November 30, partly on enthusiasm over passage of the Republican-backed tax package, which could boost company profits this year with across-the-board cuts to corporate taxes.
Big gains in U.S. blue chip companies have powered the Dow’s relentless rise to new heights over the past year, including an 87 per cent gain in aerospace giant Boeing, a 70 per cent rise in construction equipment maker Caterpillar and a 49 per cent increase in Apple.
The Dow, which was founded in 1896 and is the oldest barometer of the U.S. stock market, has nearly quadrupled in value from its low during the financial crisis in early 2009. But the global economy and spending by people and businesses and governments were much slower to recover than stocks were.
Technology companies, which put up some of the biggest gains in the last year, continued to lead the market higher. And there was more good economic news Thursday: A report showed private U.S. businesses added 250,000 jobs last month, with smaller businesses adding 94,000.
The Dow, which tracks 30 big U.S. companies, rose 152.45 points, or 0.6 per cent, to 25,075.13.
The Standard & Poor’s 500, a much broader index that professional investors prefer to use as their benchmark for large U.S. stocks, rose 10.93 points, or 0.4 per cent, to 2,723.99.
The Nasdaq composite, which is heavily weighted with technology and biotech companies, added 12.38 points, or 0.2 per cent, to 7,077.91. All three indexes set record highs a day earlier.
The Nasdaq reached a milestone of its own this week, closing above 7,000 points for the first time Tuesday.
It was another record close for Canada’s main stock index despite a sharp drop in the health-care sector, which includes some of the country’s biggest marijuana companies.
The S&P/TSX composite index was up 41.39 points to 16,412.94, gaining ground throughout the day after flatlining earlier on Thursday amid a free fall in cannabis stocks.
Pot stocks were pummelled after The Associated Press reported that U.S. Attorney General Jeff Sessions will rescind an Obama-era policy that generally barred federal law enforcement officials from interfering with marijuana sales in states where the drug is legal.
Shares of major licensed Canadian cannabis producers such as Canopy Growth Corp. (TSX:WEED) and Aphria Inc. (TSX:APH) were down 9.97 per cent and 13.79 per cent at the close of markets Thursday.