The Dow Gains 172 Points Because Economic Indicators Are Holding Up

Michael Haddad

Trump Watch. Stocks rose on Tuesday ahead of President Donald Trump’s State of the Union address in the evening. Investors will watch for signs of compromise on the border wall dispute, as well as other key issues such as drug prices, infrastructure, and international trade. In today’s After the Bell, we…

watch U.S. stocks outperform other regions; examine global economic data; and wonder if signs of weakness will persist.

A Diverging World

Markets moved up on Tuesday, boosted by positive earnings reports. The Dow Jones Industrial Average gained 172.15 points, or 0.68%, to end at 25,411.52. The S&P 500 rose 12.83 points, or 0.47%, to close at 2737.70 and the Nasdaq Composite added 54.55 points, or 0.74%, to end the session at 7402.08.

With recent gains, the U.S. stock market is leading the world again. Last week, the S&P 500 outperformed both the Tokyo Stock Price Index and STOXX Europe 600, after lagging them for most of the fourth quarter in 2018, according to Ian Wright of Goldman Sachs. Emerging markets, on the other hand, have fared better than the U.S. both during the fourth-quarter drawdown and last week, says Wright, possibly helped by a dovish Fed and weaker dollar.

U.S. stocks have been boosted in part by positive economic indicators. Nonfarm payrolls showed solid growth and exceeded expectations in January, despite the government shutdown. The ISM manufacturing Purchasing Managers Index (PMI) also rebounded to 56.6 last week from a sharp pullback in December.

There are signs of weakening, too, as the U.S. non-manufacturing PMI came in at 56.7 today, down 1.3 points from December and the lowest level since July.

Data outside of the

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