Dow closes above 23K for first time as IBM’s stock jumps
A day of modest gains on Wall Street resulted in more milestones for U.S. stocks Wednesday as the Dow Jones industrial average closed above 23,000 points for the first time.
The Standard & Poor’s 500 index and Nasdaq composite also finished at record highs.
Technology stocks and financial companies led the gainers as investors weighed the latest batch of company earnings. Strong quarterly results drove IBM shares to their biggest one-day gain since 2009. Those gains accounted for much of the 30-company Dow’s record high.
“For us it’s just another indication that it is a strong market here, year-to-date,” said Paul Springmeyer, investment managing director for US Bank Private Wealth Management. “To have the Dow up over 17 percent is a very, very strong year.”
All told, the Dow picked up 160.16 points, or 0.7 percent, to 23,157.60. The S&P 500 index rose 1.90 points, or 0.1 percent, to 2,561.26. The Nasdaq added 0.56 points, or 0.01 percent, to 6,624.22. The Russell 2000 index of smaller-company stocks gained 7.65 points, or 0.5 percent, to 1,505.14.
The S&P 500 and Dow also set records on Monday and Tuesday.
The Dow closed above 22,000 for the first time on Aug 2, and since then the best-performing components have been Boeing, Caterpillar, Goldman, Home Depot and 3M. The Dow is up 3,395 points this year, or 17.2 percent.
Positive earnings
Investors continued to size up the latest raft of company earnings Wednesday.
IBM jumped 8.9 percent after the technology and consulting company delivered strong quarterly results. The gain was the biggest one-day jump for IBM since January 2009. Even so, the stock remains down 3.9 percent for the year.
IBM’s gain was responsible for 89 points of the Dow’s increase. Gains by Goldman Sachs accounted for another 40 points of the 30-company average’s climb.
Financial stocks led the gainers Wednesday. Goldman Sachs picked up $5.94, or 2.5 percent, to $242.03. Insurer Assurant climbed $5.94, or 6.2 percent, to $101.80.
Traders bid up shares in companies that reported quarterly results that beat the Street.
Northern Trust shares picked up 3.8 percent after the bank’s earnings and revenue beat analysts’ estimates. The bank also said it plans to cut $250 million in annual spending by 2020. The stock added $3.48 to $94.58.
Investors also sized up corporate deals and other developments making the news Wednesday.
Anthem, the second-largest U.S. health insurer, rose 2.4 percent after announcing that it’s entered a prescription benefits management deal with CVS. Anthem shares added $4.53 to $191.79. CVS rose $1.47, or 2 percent, to $74.10.
The Nielsen company climbed 4.2 percent after the long-time tracker of TV viewership said it now has a way to collect details on the number of people who watch programs on streaming video services like Netflix and Amazon. Nielsen said that eight television networks and studios, including ABC and NBC, have already subscribed to its new service. The stock rose $1.69 to $41.69.
Electronic Arts slid 2.4 percent after the video game company said it will postpone the release of an upcoming “Star Wars” game to make changes. The game was scheduled to be released next year or in early 2019. EA is also closing down its Visceral Games studio. Shares lost $2.82 to $113.16.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.34 percent from 2.30 percent late Tuesday.
Analyst's viewpoint
Despite the market's recent string of record highs and the Dow's latest milestone, stocks can still grind higher as long as the economy continues to expand and companies grow revenue, said Quincy Krosby, chief market strategist at Prudential Financial.
"Overall, the underpinning for the market is solid," Krosby said. "You have global growth picking up the way it has over the last quarter, it's an indication that demand is picking up as well and it's why you have global markets doing well."
