NEW YORK – The Nasdaq Composite Index surged past 6,000 for the first time as corporate results and the promise of Trump administration tax reform boosted risk appetite. A fresh American tariff on Canadian lumber sent the loonie and Mexican peso lower.
The Dow Jones Industrial Average jumped more then 200 points as Caterpillar Inc. surged 8 percent and McDonald’s Corp. rose 5 percent after reporting results. The S&P 500 Index closed near a record, with materials producers rallying with industrial metals. Stocks in Europe rose to a 20-month high.
The Canadian dollar dropped 0.5 percent to 1.35648 per dollar as Trump intensified a trade dispute with Canada, slapping tariffs of up to 24 percent on imported softwood lumber. Mexico’s peso lost 0.8 percent to 18.8893 per dollar. The euro rose 0.4 percent to $1.0911, the highest level in five months. The yen fell 0.9 percent to 110.767 per dollar. The currency dropped 0.6 percent in the previous session.
Investor focus shifted to the U.S. economy where corporate earnings and data on housing starts underpinned speculation that growth is poised to accelerate a day before Trump is expected to unveil a tax plan that would cut the upper corporate rate to 15 percent.
The Dow rose 1.1 percent, or 232.16 points, to 20,996.05 at 4 p.m. in New York. It’s about 0.5 percent below its all-time high reached March 1. The S&P 500 Index climbed 0.6 percent, 0.3 percent from its closing record. The Nasdaq Composite added 0.7 percent to 6,025.49, an all-time high. An S&P index of homebuilders retreated 1.3 percent as the lumber tariff raised the cost to make new houses. The Stoxx Europe 600 Index gained 0.2 percent. The gauge jumped 2.1 percent to the highest since August 2015 on Monday.
Trump’s decision to impose a fresh tariff rekindled protectionist concern, while shares in Europe rose as political risk abated, though tensions around North Korea continued to simmer.
“Attention will fast move over to Washington with the outline of the Trump tax plan likely tomorrow, the need to avoid the shutdown on Friday and the end of the first 100 days of Trump on Saturday” with the White House determined that higher growth can offset tax cuts, Jim Reid, a strategist at Deutsche Bank AG in London, wrote in a note.
Jeremy Herron is a reporter for Bloomberg News.
