Tags: dow | hits | record | trump | policies

Trump Policies Power Dow to Record, Leaving S&P 500 in the Dust

Trump Policies Power Dow to Record, Leaving S&P 500 in the Dust

Tuesday, 06 December 2016 04:26 PM

Donald Trump’s vows to ramp up infrastructure spending and ease banking regulations are giving a burst to the Dow Jones Industrial Average that’s sending it rocketing past the broader market.

The 120-year-old stalwart of the U.S. equity market powered to a fresh record Monday as the S&P 500 Index hovered nine points below its own all-time high and traded near its biggest discount to the Dow since May 2014. The two indexes are the least correlated in almost six years as the blue-chip measure benefits from the burnished outlook for industrial companies and banks ushered in by Trump’s win, while losses in technology companies and utilities tug at the S&P 500.

Speculation the president-elect’s agenda will favor U.S. manufacturers and big factory employers has lit a fire under the Dow, which counts industrial stocks like General Electric Co. and Boeing Co. as its biggest sector with a 20 percent weighting. They’re less than 11 percent of the S&P 500.

The Dow is set to outperform its broader counterpart on an annual basis for the first time since 2011, rallying 10 percent this year, while the S&P 500 has climbed 7.9 percent. The day before the election they were pretty much neck-and-neck, with the Dow up 4.8 percent in 2016 and the S&P 500 headed for a yearly advance of 4.3 percent.

The 7.9 percent climb in U.S. industrial stocks since Nov. 7 is second only to the 15 percent surge racked up by financial shares, with banks buoyed by plummeting bond yields. In fact, the S&P 500’s industrial sub-index rose to a level Dec. 1 that marked its biggest premium since 2011 over the wider benchmark. 

Utilities have led losses in the S&P 500 since the election, slipping 5.2 percent, while technology shares -- thought to be disadvantaged when it comes to the president-elect’s trade and immigration policies -- have fallen by 1.3 percent. Tech has the biggest weighting in the S&P 500 at 21 percent, followed by banks with 15 percent and health-care and consumer-discretionary shares at 14 percent and 12 percent, respectively.

 

© Copyright 2020 Bloomberg News. All rights reserved.

   
1Like our page
2Share
Newsfront
Donald Trump's vows to ramp up infrastructure spending and ease banking regulations are giving a burst to the Dow Jones Industrial Average that's sending it rocketing past the broader market.The 120-year-old stalwart of the U.S. equity market powered to a fresh record...
dow, hits, record, trump, policies
344
2016-26-06
Tuesday, 06 December 2016 04:26 PM
Newsmax Media, Inc.
 

Newsmax, Moneynews, Newsmax Health, and Independent. American. are registered trademarks of Newsmax Media, Inc. Newsmax TV, and Newsmax World are trademarks of Newsmax Media, Inc.

NEWSMAX.COM
America's News Page
© Newsmax Media, Inc.
All Rights Reserved