US Stocks May Record New Highs on Earnings Optimism

Traders and financial professional work ahead of the closing bell on the floor of the New York Stock Exchange Jan. 12 2018 in New York City

Futures on the Dow Jones Industrial Average surged more than 200 points on Tuesday, indicating that the blue-chip index could open above 26,000 for the first time, supported by strong earnings from UnitedHealth. The Nasdaq Composite Index was down 37.38 points, or 0.51 percent, to 7,223.69. The Journal notes that the records keep falling faster: The Dow took only 23 trading days to hit 25,000 from 24,000 on January 4, and the previous 1,000-point milestone (which actually happened twice: getting to 11,000 and 21,000) took 24 trading days.

Also Wednesday, the S&P 500 gained 0.9 percent, closing at 2,802.56.

USA crude fell 0.68 percent to $63.86 per barrel and Brent was last at $69.28, down 1.39 percent on the day. The US Bancorp also provided stronger finance statement than market expectations.

Industrial production in the US probably increased in December, a report may show Wednesday, completing a solid year for manufacturing.

The recent rally came off Wall Street on the day as traders struggled to find direction, though the Dow did stay above 26,000.

Given early trading on Tuesday, Boeing now represents more than 9% of the Dow 30, while GE represents less than 0.5%, meaning Boeing has more than 18 times as much power as GE.

The pan-European FTSEurofirst 300 index percent and MSCI's gauge of stocks across the globe shed 0.04 percent after hitting a record for a third straight session.

But each of the major Wall Street indexes fell into negative territory as materials, down 1.3 percent and energy, off 1.2 percent, slumped.

In related news, Director Mark Edward Thompson sold 1,000,000 shares of the firm's stock in a transaction dated Tuesday, November 7th.

"But at the same time", he adds, "there is a danger that the US stock market could accelerate so quickly that it decouples from the economic fundamentals most analysts think now underpin it". This is a possible regime change, as stocks and the VIX traditionally trade in opposition to each other.

That kind of behavior is typical at the end of bull markets, according to Dan Suzuki, U.S. equity strategist at Bank of America Merrill Lynch. The International Monetary Fund estimates the world economy will grow by 3.7 percent this year after expanding by 3.6 percent in 2017, further increasing demand for United States exports. On the upside, International Business Machines Corp. rose 2.8% after Barclays upgraded the stock to overweight from underweight.

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