The Dow Jones Industrial Average has gone above the 22,000 mark for the first time, boosted by bumper company earnings and a weak dollar, with investors shrugging off the latest upheavals in the White House.
The move comes five months after the Dow passed the 21,000 level, having previously crossed 20,000 in January. This year it is up about 11%, and since the election of Donald Trump as US president in November, it has risen more than 20%. Meanwhile, the S&P 500 and Nasdaq Composite are also near record highs.
This latest Wall Street surge has been helped by forecast-beating results from Apple, which also pleased investors by dismissing suggestions its forthcoming iPhone 8 could be delayed. Apple shares jumped nearly 6% to a record $159 (£120), before slipping back to $157 by lunchtime.
The Dow had added 0.2% to 22,007 by lunchtime after hitting a peak of 22,036 during the morning. It is still on track for another record close, the sixth in a row.
US markets have been buoyed for much of this year by hopes that President Trump would unveil tax reforms and infrastructure plans to boost the country’s economy. However, recently his plans to abolish the Obamacare healthcare system received a setback, casting doubt on his ability to push through the rest of his legislative programme. The threat of impeachment is also hovering in the background, while several key members of his team in the White House have resigned or been fired.
However, strong company results from the likes of Goldman Sachs, Boeing and Apple have kept investors buying despite the concerns over Trump. Two-thirds of the S&P 500 companies have reported quarterly results, for the three months to the end of June, and about 72% of them have beaten expectations.
Meanwhile, the dollar has weakened, partly on concerns over Trump and also because of the growing belief that the US Federal Reserve will not raise interest rates again in the immediate future with the economy showing signs of running out of steam.
Bob Doll, chief equity strategist at Nuveen Asset Management, told Bloomberg TV: “Returns on [cash] are low, bonds are sitting there doing not much and earnings are coming through. So stocks are the story.”
On Wednesday, new figures showed weaker than expected US jobs figures for July, with private sector employment rising by 178,000, rather than the 185,000 predicted by economists. On Friday, the official non-farm payroll numbers are forecast to show a 180,000 increase, down from June’s figure of 187,000.
The dip in the dollar – which benefits US exporters – pushed the pound to an 11-month high of $1.3245 against the US currency.
Michael Hewson, chief market analyst at CMC Markets UK, said: “US investors have continued to turn a deaf ear to the ongoing political intrigue unfolding in Washington DC [and] for now the direction of travel continues to remain positive.”
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