US: Dow, S&P 500 end at record highs, shrugging off Trump tariff threat
WALL Street stocks powered to fresh records on Tuesday, shrugging off a threat from President-elect Donald Trump to enact new tariffs on Mexico, Canada and China.
The Dow Jones Industrial Average finished up 0.3 per cent at 44,860.31, its third straight closing record.
The broad-based S&P 500 rose 0.6 per cent to 6,021.63, also a record, while the tech-rich Nasdaq Composite Index gained 0.6 per cent to 19,174.30.
Trump, who doesn’t take office until Jan 20, made his threat in social media posts on Monday night, announcing huge import tariffs against neighbors Canada and Mexico and also rival China if they do not stop illegal immigration and drug smuggling into the United States.
Investors view Trump’s inclination towards trade protectionism as a headwind to economic growth and higher equity prices. But Tuesday’s response suggests the market views the warning as a bargaining chip.
“In theory, higher tariffs should not be good news for stocks. But, you know, I think the market’s chosen to think of (it) as a negotiating tactic,” said Steve Sosnick of Interactive Brokers.
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“You have bullish sentiment,” said LBBW’s Karl Haeling. “People are tending to look at things as positively as possible.”
In other economic news, the Conference Board’s consumer confidence index rose to 111.7 this month, up from 109.6 in October, boosted by greater optimism surrounding the labor market.
Among individual companies, Best Buy tumbled 4.9 per cent as it cut its full-year sales outlook after a big slowdown in sales leading into the presidential election. The electronics retailer said sales have rebounded since the election.
Other retailers also fell, including Burlington Stores, down 1.6 per cent; Dick’s Sporting Goods, down 1.4 per cent; and Kohl’s, down 17 per cent.
Amgen dropped 4.8 per cent after reporting that trials of its MariTide drug led to weight loss of up to 20 per cent after 52 weeks. The drop in shares appeared to show disappointment that the impact was not even greater. AFP