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The Dow Jones Industrial Average has just reached 20,000 points for the first time ever | The Dow Jones Industrial Average has just reached 20,000 points for the first time ever |
(35 minutes later) | |
Wall Street's Dow Jones Industrial Average stock index on Wednesday hit the 20,000 mark for the first time in its history. | Wall Street's Dow Jones Industrial Average stock index on Wednesday hit the 20,000 mark for the first time in its history. |
In morning trading in the US, the index added around 0.5 per cent to surpass the psychologically important threshold and take its gains since this time last year to 23.8 per cent, according to Thomson Reuters data. | |
Along with Wall Street's S&P 500 and Nasdaq Compsite, the Dow has been on a tear in recent months, largely spurred by US President Donald Trump's campaign promises of harsh tax and regulatory roll-backs and higher infrastructure spending. | |
Bank stocks enjoyed particularly dramatic gains in the wake of Mr Trump's November election victory. And although moves in recent weeks have become more muted, US equities have remained in wide-spread favour relative to other asset classes around the world. | |
"We are holding a greater exposure to US equities than we have had for some time," said David Absolon, investment director at Heartwood Investment Management. He said that although a months-long market rally had showed signs of slowing and even pulling back, he expected that to be "a pause rather than anything more serious". | |
Neil Wilson, a market analyst at ETX Capital, said that cracking the 20,000 mark on the Dow is "psychologically huge" and "confirms that the ‘great rotation' from bonds to stocks is definitely upon us." In recent years, many investors have been migrating out of fixed income products, like government and corporate bonds, as a result of rock-bottom interest in places like the US, the UK and the rest of Europe. For those hungry for returns, stocks have frequently offered a much more lucrative alternative. | |
More to follow... | More to follow... |