Dow Jones SP 500 rallies to record highs TSX racks up 100

by Linda Nguyen, The Canadian Press Posted Dec 7, 2016 9:31 am MDT Last Updated Dec 7, 2016 at 3:40 pm MDT AddThis Sharing ButtonsShare to TwitterTwitterShare to FacebookFacebookShare to RedditRedditShare to 電子郵件Email Dow Jones, S&P 500 rallies to record highs; TSX racks up 100 points TORONTO – Major North American stock markets pushed higher Wednesday, with the Dow Jones and S&P 500 hitting all-time records, as anticipation continued to build over the corporate policies of incoming U.S. president-elect Donald Trump.In New York, the Dow Jones industrial average surged 297.84 points at 19,549.62, while the S&P 500 added 29.12 points at 2,241.35. The tech-heavy Nasdaq composite gained 60.76 points at 5,393.76.The broad-based rally was driven by consumer and technology stocks, which tend to do well in a growing economy, as well as stocks that traditionally pay high dividends such as telephone and real estate companies.The gains were the biggest for the markets since early November.Steve Belisle, a senior portfolio manager at Manulife Asset Management, says investors continued to be overly positive over what type of policies Trump will bring to the White House in the New Year. But questions remain as to whether he will stick to his promises of deregulating the banking and health sectors, as well as embarking on massive spending for infrastructure projects.Belisle cautioned that if those predictions do not hold true, the markets could be in for a dramatic pullback.“It’s a possibility because a lot of good things are getting priced in at this point,” he said from Montreal. “There could be some disappointment.”On Wednesday, shares in health-care companies softened after Trump told Time magazine that he wants to reduce drug prices. He did not say how his administration plans to do that.Democratic nominee Hillary Clinton campaigned on reducing drug prices, and drug company stocks had rallied since the election as investors felt that was less likely to happen under Trump.On Bay Street, the Toronto Stock Exchange’s S&P/TSX composite index advanced 111.95 points at 15,237.75, with 11 of the 13 TSX sectors finishing positive.In economic news, the Bank of Canada announced it was holding its benchmark interest rate at 0.5 per cent, due to an “undiminished” uncertainty in the global economy.The move had been expected.Belisle said the bank is still in the position where rates are so low, and there is such a large increase in household debt, that they don’t want to lower rates further to drive what some consider a bubble.“It’s an equilibrium that the bank is currently in. I don’t think they have a lot of flexibility to do anything up or down at this stage,” he said.The Canadian dollar added 0.27 of a U.S. cent at 75.55 cents US.On the commodity markets, the January crude oil contract fell $1.16 to US$49.77 per barrel, while the January contract for natural gas pulled back three cents at US$3.60 per mmBTU.The February gold contract climbed $7.40 at US$1,177.50 and the March copper contract lost four cents at US$2.64 per pound.— With files from The Associated PressFollow @LindaNguyenTO on Twitter.

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