Dow closes above 23,000 for first time as IBM jumps

 

NEW YORK: The Dow Jones industrial average closed above the 23,000 level for the first time on Wednesday, driven by a jump in IBM after the computing giant hinted at a return to revenue growth.

The close above 23,000 came just 54 trading days after the Dow hit 22,000 on August 2. That’s roughly half the time it took the index to move from 21,000 to 22,000 and marks the fourth time this year the Dow has reached a 1,000-point milestone.

“Retail investors continue to pour into the marketplace, and with each headline about a new record, and especially round numbers like that, people tend to feel like they’re missing out and you kind of suck more people into the market,” Ian Winer — the head of equities at Wedbush Securities in Los Angeles — said.

“Ultimately, the only way you’re going to top is by getting everybody all in. And we’re getting close.”

The Dow had briefly surpassed the all-time peak on Tuesday but closed just shy of it.

Shares of IBM, which beat expectations on revenue, jumped 8.9 percent and accounted for about 90 points of the day’s 160 point-gain in the blue-chip index.

Solid earnings, stronger economic growth, and hopes that US President Donald Trump may be able to make progress on tax cuts have helped the market rally this year.

The S&P 500 and Nasdaq also hit record closing highs.

The Dow Jones Industrial Average rose 160.16 points (or 0.7 percent) to end at 23,157.6, the S&P 500 gained 1.9 points (or 0.07 percent) to 2,561.26 and the Nasdaq Composite added 0.56 points (or 0.01 percent) to 6,624.22.

“Today the catalyst is clearly IBM… which appears to have turned the corner. It gave the Dow the boost to stay over 23,000,” Quincy Krosby — the chief market strategist at Prudential Financial in Newark, New Jersey — said.

The financial index jumped 0.6 percent, led by bank stocks recovering from recent post-earnings losses. Bullish calls by brokerages helped to support the bank shares.

Bank shares had run up ahead of recent results, which resulted in some selling following the earnings news, Krosby said.

Abbott rose 1.3 percent after the company’s profit beat estimates on strong sales in its medical devices business.

After the bell, shares of eBay fell 4 percent following results.

Advancing issues outnumbered declining ones on the NYSE by a 1.09-to-1 ratio; on Nasdaq, a 1.32-to-1 ratio favoured advancers.

About 5.6 billion shares changed hands on US exchanges, below the 5.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.