US banking sector shares had on Thursday surged to levels not seen since the midst of the 2008 financial crisis, pushing the Dow to an all-time high, while technology shares sank as Wall Street rearranged its bets to benefit from Donald Trump’s presidency.
The S&P 500 financial sector surged 3.70 per’cent to its highest since the 2008 financial crisis, bringing its gain since Trump’s surprise victory in Tuesday’s election to 7.9 per cent, its biggest two-day gain since 2011.
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Trump has sided with leading conservatives in calling for the repeal of the 2010 Dodd-Frank Financial Reform Act largely opposed by banks.
“The Trump campaign did say it would repeal Dodd-Frank. Rates are higher and the yield curve is steeper. Those are all good things for the banks,” said Warren West, principal at Greentree Brokerage Services in Philadelphia.
Apple dropped 2.79 per cent while Amazon.com fell 3.82 per cent and the S&P 500 technology index fell 1.59 per cent.
The Dow Jones industrial average jumped 1.17 per cent to end at 18,807.88, smashing through its previous record high set in August by almost 1 per cent.
The S&P 500 rose 0.2 per cent to 2,167.48 while the Nasdaq Composite dropped 0.81 per cent to 5,208.80, hurt by losses in tech shares.
With Thursday’s gain, the Dow is up 8 per cent in 2016 and the S&P 500 is up 6 per cent.
High-dividend sectors utilities, telecom services and consumer staples sold off by more than 2 per cent as bond yields rose due to expectations of higher interest rates.
The market got a lift after St. Louis Federal Reserve President James Bullard said the Republican sweep of the White House and Congress could break the current gridlock over national policy in a potential boon to the US economy.
Industrials trailed the financials with a 2.05 per cent advance.
Macy’s rose 5.6 per cent after the department store operator raised its full-year sales forecast and announced a partnership to monetise some of its real-estate assets.
After the bell, Nordstrom reported quarterly results that sent its shares 5 per cent higher while Walt Disney’s quarterly report pushed its stock down 2.6 per cent.
Declining issues outnumbered advancing ones on the NYSE by a 1.15-to-1 ratio; on Nasdaq, a 1.58-to-1 ratio favoured advancers.
The S&P 500 posted 84 new 52-week highs and seven new lows; the Nasdaq Composite recorded 336 new highs and 48 new lows.
About 12.3 billion shares changed hands on US exchanges, far above the 7.3 billion daily average over the last 20 sessions.