Wall Street: Dow Jones hits record high, Nasdaq drops sharply
- Tech shares suffer losses on current market developments.
- Financials lift the Dow Jones higher.
- Real GDP growth in the U.S. beats experts' estimates.
On Wednesday, major equity indexes in the U.S. painted a mixed picture, with Dow Jones Industrial Average surging to fresh all-time highs and the Nasdaq Composite recording its biggest daily percentage loss in more than three months.
Solid macroeconomic data from the United States, heightened expectations of a hawkish stance by the Fed, and hopes over corporate tax cuts shifted investors' attention to sectors that would perform better in that environment such as financials and industrial. "We are certainly seeing a change in leadership at least for today in that we are taking profits from technology and redistributing those profits to areas that will benefit from lower taxes, less regulation, higher interest rates and kind of later stages of the economic cycle,” Michael Arone, chief investment strategist at State Street Global Advisors in Boston, told Reuters.
Today's data from the United States revealed that the economic expansion in the U.S. continued to gather strength with the real GDP coming in at its best level in nearly three years at 3.3% on the third quarter. Meanwhile, testifying before the Joint Economic Committee, Federal Reserve Chairwoman Janet Yellen said that with gradual adjustments in the stance of monetary policy, the economy would continue to expand and the job market would strengthen somewhat further.
The S&P 500 Financials Sector (SPSY) and the Industrial Sector (SPLRCI) led all indexes with a1.77% and 0.8% rise respectively. On the other hand, the S&P 500 Information Technology Sector (SPLRCT) dropped 2.56%, weighing on the tech-heavy Nasdaq Composite, which closed the day 89.18 points, 1.29%, lower at 6,823.17.
The Dow Jones Industrial Average added 103.11 points, or 0.43%, to 23,931.49, and the broader S&P 500 struggled to find direction throughout the day and closed the day with a small 0.1% loss at 2,624.43.