While you were sleeping: Dow surges in first full trading day of 2017

Stocks on Wall Street recovered some of three end-of-year losses in the first major trading day of the new year.

A surge in shares of financial companies helped the Dow Jones Industrial Average jump more than 150 points shortly after the opening bell, bringing the blue-chip index within 100 points of the never-before-reached 20,000 level. But as banks pared their early gains, so too did the Dow industrials.

At the close, the Dow industrials rose 119.16 points, or 0.6%, to 19,881.76, after having slipped in the last trading session of 2016. The S&P 500 added 0.85% to 2257.83, boosted by shares of telecom and health-care companies, and the Nasdaq Composite also rose 0.85% to 5429.08.

“We ended the year with nothing to [damp] the optimism about the 2017 economic outlook,” Kit Juckes, global head of foreign-exchange strategy Société Générale, told Dow Jones. 

Still, some investors caution that stock valuations appear stretched, and that the market’s year-end run may have been overdone.

Headwinds like the strengthening US dollar and the potential for protectionist policies – both of which could hurt multinational companies – could offset the tailwinds of a growing economy and improving corporate earnings.

“We’re in the modestly positive camp,” Jason Pride, director of investment strategy for Glenmede, told the Wall Street Journal.

“We were surprised by the market’s strength going into the end of the year, which makes our mindset a bit more cautious heading into 2017.”

Trump targets GM 
Meanwhile, it was a bumpy day of trading for General Motors, which became the latest corporation to come under attack by President-elect Donald Trump.

He criticised the car maker on Twitter for sending some of its Chevrolet Cruze cars produced in Mexico to US dealerships. Shares initially slid in premarket trading, but recovered to trade up 0.5%.

While major indexes gained, developed government bonds continued their slide, with the yield on the US 10-year Treasury note climbing to 2.452% from 2.446% previously.

Oil futures tumbled as the dollar rose and doubts about whether major producers will be able to follow through on an agreement to cut production continued to weigh on the market.

US crude futures rose above $US55 a barrel for the first time since July 2015 but the rally quickly lost steam.

West Texas Intermediate, the US benchmark, settled down 2.59%, at $US52.33 a barrel while Brent crude, the global oil benchmark, fell 2.38%, to $US55.47 a barrel in London.

Gold prices closed at a three-week high, reversing losses from a rising US dollar amid renewed investor interest in the new year.

Gold for February delivery settled up 0.9% at $US1162.00 an ounce, the highest settlement since December 14.

In Europe, banks and oil-and-gas companies led the Stoxx Europe 600 index 0.7% higher and into bull-market territory, marking a gain of 20% from its previous low.

London’s FTSE 100 rose 0.5%, notching its fourth consecutive record close – its longest such streak of records since 1999,