The US markets closed higher on Thursday, with the Dow Jones Industrial Average logging its 71st record close in 2017, buoyed mostly by gains in bank shares and a slight pick-up in energy and materials, as crude-oil prices perked up in seasonally light trading volume. Trading has been muted as investors have little incentive to make decisive bets on assets perceived as risky in the penultimate session of trade ahead of the New Year’s holiday on Monday. However, Thursday’s late burst suggests that investors aren’t ready to dump stocks going into next year. Moreover, expectations are growing that President Donald Trump’s administration will shift attention to a $1 trillion infrastructure-spending bill, which could deliver a further jolt to Wall Street buying after Republicans passed the most sweeping overhaul of the US tax code in 30 years as well as a stopgap spending bill to keep the government funded into early 2018.
On the economy front, the Purchasing Managers Index for Chicago showed a rise of 67.6 in December from 63.9 in the previous month, compared with expectations for 62. Initial US jobless claims, a tool to measure layoffs, were unchanged at 245,000 in the seven days ended December 23. The more stable monthly average of claims rose slightly - they were up 1,750 to 237,750. The number of people already collecting unemployment benefits, known as continuing claims, edged up by 7,000 to 1.94 million. Jobless claims are a bit higher than they were at the end of summer, but they are still 5% lower now as compared with exactly one year ago. Claims often jump and decline during the holiday season. Perhaps more important, the total number of Americans who applied for benefits in 2017 is on track to be at its lowest level since 1973. The very low level of layoffs can be said to reflect the strongest labor market since at least the turn of the century.
Separately, the US goods trade deficit widened by 2.3% in November to $69.7 billion. Exports rose a seasonally adjusted 3% during the month, while imports were up 2.7%. The US exported more capital goods and automotive vehicles, but imported more consumer goods. Advance wholesale inventories rose 0.7%, while an advance look at retail inventories ticked up just 0.1%.
The Dow Jones Industrial Average added 63.21 points or 0.26 percent to 24,837.51 and the Nasdaq gained 10.824 points or 0.16 percent to 6,950.16, and the S&P 500 edged higher by 4.92 points or 0.18 percent to 2,687.54.
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