Dow tops 20,000 as earnings feed rally, bonds fall

THE DOW Jones Industrial Average climbed past 20,000 for the first time as stocks around the world extended a rally after corporate earnings reignited investors’ optimism in economic growth. / BLOOMBERG NEWS PHOTO
THE DOW Jones Industrial Average climbed past 20,000 for the first time as stocks around the world extended a rally after corporate earnings reignited investors’ optimism in economic growth. / BLOOMBERG NEWS PHOTO

NEW YORK – The Dow Jones Industrial Average climbed past 20,000 for the first time as stocks around the world extended a rally after corporate earnings reignited investors’ optimism in economic growth. Bonds sold off with oil.

The index for American blue chips took the round-number milestone after a handful of rallies fell short in the past month. It was the second-fastest 1,000-point trip in its history. The MSCI All-Country World Index headed for the highest closing level since 2015. European equities were swept up in trades favoring banks and cyclical companies. Bonds fell. The Mexican peso slumped after U.S. President Donald Trump said he plans to unveil actions that include steps toward building a border wall. Oil fell on increased U.S. stockpiles.

Corporate earnings are offering relief after traders began to unwind a rally in the dollar and equities amid concern that post-U.S. election gains had gone too far. Other global-growth signals such as rising bond yields are feeding higher bank lending margins, and re-invigorated spending is boosting consumer cyclicals.

“The rally shows that markets have a degree of resilience” to political risks including elections in France and Germany and Britain’s departure from the European Union, said Andrzej Pioch, who helps oversee $1.3 billion as a money manager at Legal & General Investment Management Ltd. in London. “Attention is turning to data and away from politics.”

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Here are the main moves in markets:

Stocks

The Dow rose 117.76 points to 20,030.47 at 9:31 a.m. in New York. The Stoxx Europe 600 Index jumped 1.2 percent, while Germany’s DAX headed for the highest closing level since July 2015. Personal computer maker Logitech International SA led Europe’s stock gains after beating quarterly profit estimates, surging 16 percent. Banco Santander SA rose 3.4 percent on better-than-expected quarterly profits.

Bonds

The yield on the 10-year Treasury was little changed at 2.467 percent.

Currencies

The dollar weakened against all its group of 10 peers except the Australian dollar while the Bloomberg Dollar Spot Index edged lower. The Mexican peso dropped to a session low after a New York Times report said Trump will sign an executive order for a border wall to be built. Turkey’s lira weakened 0.8 percent to 3.8155 per dollar on speculation further central bank tightening may be needed to stem its declines.
Commodities

The Bloomberg Commodity Index, which measures returns on raw materials, was down 0.5 percent, heading for the biggest drop in a week. West Texas Intermediate crude lost 0.9 percent to drop below $53 a barrel. Most industrial metals declined on the London Metal Exchange, cutting gains after the LMEX Index closed at the highest level since May 2015 on Tuesday. Iron-ore futures increased 1 percent to near the highest level in more than two years. Speculation of sustained Chinese demand for imports is outweighing repeated warnings from analysts that the rally is overextended and will unravel.

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