Dow in full-throttle bull market mode; hits magic 25 000 mark

New York - The Dow shot above 25 000 points for the first time on Thursday as strong US private-sector hiring data extended a stocks rally already boosted by the recent US tax reform.

US exchanges opened 2018 in full-throttle bull market mode, bidding stocks up and continuing the succession of records seen last year, especially following the massive tax cut that President Donald Trump signed into law just before Christmas.

The blue-chip index hit the landmark within minutes of the opening bell and pushed higher from there before leveling off. The Dow Jones Industrial Average finished at 25 075.13, up 0.6%.

The broad-based S&P 500 rose 0.4% to 2 723.99, while the tech-rich Nasdaq Composite Index advanced 0.2% to 7 077.91, both adding to Wednesday's records.

Adding to the optimism about tax reform was the better-than-expected economic data, after payroll firm ADP reported that private employers hired 250 000 more workers last month, well above the 190 000 that had been expected by analysts.

The data come ahead of the more closely scrutinised government jobs report on Friday.

Analysts said strong international economic data also reinforced confidence in a strengthening global market.

"Yesterday's PMIs came from all over the world, and they are up everywhere," said Maris Ogg, a founding principal at Tower Bridge Advisors. "The path of least resistance is still up."

More volatility ahead?

The Dow's push above 25 000 is another landmark for the index amid a multi-year bull market since the depths of the Great Recession that followed the 2008 financial crisis.

The latest push higher comes as US unemployment and consumer confidence linger at or near multi-year high levels, and as US tax cuts have led analysts to boost corporate earnings estimates.

Market watchers vary on where they see stocks going from here, with some forecasters expecting the positive momentum to continue throughout the year and others anticipating greater volatility.

Key hurdles that could derail the surge in equities include the possibility of more aggressive tightening of monetary policy by the Federal Reserve and other global central banks, as well as fears the Trump administration's tough posture with US trading partners could lead to a trade war.

But Ogg senses greater confidence among clients as they grow accustomed to the Trump presidency.

"Last year at this time, I got calls from clients saying 'You've got to get me out of this. I am really nervous he'll take us to war,'" she said. "I am getting less of that."

Still, stock valuations relative to earnings, although not at all-time peaks, are at the "upper range" of normal levels, she said.

CFRA Research's chief investment officer Sam Stovall expects greater volatility this year compared with the placid 2017.

Earlier this week he projected the S&P 500 would end the year at 2 800, which implies a large portion of the year's gains have already happened.

Retail shares slump

Major gainers in the blue-chip index on Thursday included banks JPMorgan Chase and Goldman Sachs, and credit card company American Express, two sectors expected to benefit from higher interest rates. All rose at least 1%.

Other Dow leaders included IBM and General Electric, companies that have underperformed the broader market in recent years.

They were offset somewhat by Intel, which dropped 1.8% amid questions over a defect in computer chips that could render sensitive data vulnerable to hackers.

Retailers also were under pressure following holiday performance updates by department stores showing sales improved, but perhaps not as much as hoped.

Macy's, which rose nearly 35% in the last two months of 2017, dropped 3.3% after reporting that comparable sales rose 1.1% in the key November-December period.

Target, Best Buy and Gap all fell more than 1%.

Tesla Motors lost 0.8% after again pushing back its time-frame for ramping up output on the closely-watched Model 3 vehicle.

The electric carmaker said it now expects to hit a production level of 5 000 a week by the end of the second quarter instead of at the end of the first quarter.

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