Banks and other financial companies led U.S. stocks mostly higher in early trading Thursday, building on a strong rally the day before in the wake of the election of Donald Trump as the next U.S. president. Health care and industrial stocks were also big gainers, while safe-haven assets like utilities and phone companies slumped.
KEEPING SCORE: The Dow Jones industrial average climbed 122 points, or 0.7 percent, to 18,712 as of 10:24 a.m. Eastern time. The Standard & Poor’s 500 index gained 2 points, or 0.1 percent, to 2,165. The Nasdaq composite index slipped 27 points, or 0.5 percent, to 5,223.
TRUMP BOUNCE: The upcoming Trump presidency, which will commence on Jan. 20, put many investors in a buying mood, giving many global stock indexes a lift early Thursday. Traders were focusing on Trump’s promises to boost U.S. economic growth through infrastructure spending and by cutting red tape, rather than uncertainties such as what he might do with trade agreements. Before the election, markets had been worried about a Trump presidency because his campaign promises carried few policy details, making him an unknown quantity compared with rival Hillary Clinton.
BANKS SURGE: Several big banks were moving higher amid speculation that a Trump presidency could result in higher interest rates and less government regulation, which tend to benefit banks and other financial stocks. JPMorgan Chase climbed $3.10, or 4.3 percent, to $76.38, the highest gainer in the Dow. Goldman Sachs rose $4.13, or 2.1 percent, to $196.73.
BETTER QUARTER: Macy’s rose 3.7 percent after the department store chain raised its sale outlook for the year, citing improved business in the third quarter. The stock gained $1.42 to $39.80.
BONDS: The sell-off in bonds continued, sending bond prices lower and kicking up the yield on the 10-year Treasury note to 2.12 percent from 2.06 percent late Wednesday. That yield is a benchmark used to set interest rates on many kinds of loans including home mortgages. Traders have been selling bonds more aggressively to hedge against the possibility that interest rates, which have been ultra-low for years, could rise steadily again under Trump’s administration.
MARKETS OVERSEAS: In Europe, Germany’s DAX was up 0.2 percent, while the CAC-40 in France was 0.3 percent higher. Britain’s FTSE 100 was down 0.7 percent. Russia was one of the biggest gainers in Europe amid optimism there that Trump’s election will improve relations. The Micex index in Moscow was up 3.4 percent.
In Asia, shares posted hefty gains as they responded to the optimism recorded in Europe and the U.S. the day before. Japan’s benchmark Nikkei 225 index was the standout performer, rocketing 6.7 percent after sliding more than 5 percent the day before. South Korea’s Kospi advanced 2.3 percent and Hong Kong’s Hang Seng added 1.9 percent. Australia’s S&P/ASX 200 surged 3.3 percent.
ENERGY: Benchmark U.S. crude was down 66 cents, or 1.5 percent, at $44.61 a barrel in New York. Brent crude, used to price international oils, was down 31 cents, or 0.7 percent, at $46.05 a barrel in London.
CURRENCIES: The dollar has been fairly solid since Trump’s victory. The U.S. currency rose to 106.81 yen from 105.84 on Wednesday. The euro was down to $1.0878 from $1.0930. The Mexican peso recouped some losses after plunging against the dollar Wednesday. The dollar weakened to 20.59 Mexican pesos from 19.87 pesos, which was still near its lowest level in decades. The Mexican currency has been in a slump as traders look ahead to potential problems under a Trump presidency. He has repeatedly said he wants a wall built to keep illegal Mexican immigrants out of the United States and has threatened to tear up a North American trade agreement.