While you were sleeping: UPDATED Dow approaches 20,000 milestone

Wall Street climbed to fresh records, again, with the blue chip Dow Jones Industrial Average closing at 19,911.72 after earlier coming within less than 50 points of 20,000 at a record intraday high of 19,953.75.

The Dow's gain was 114.78 points, or 0.6%, and was led by advances in IBM and Intel shares, trading 2.2% and 2.1% higher respectively.

Bucking the trend were Boeing and Procter & Gamble shares, down 0.8% and 0.6% respectively.

The Standard & Poor's 500 Index hit a record 2276.88 before closing up 0.65% at 2271.72, while the Nasdaq Compopsite also hit a record 5486.75 before closing up 0.95% at 5463.83.

The Dow has risen 8.6% since Election Day, compared with 6.2% for the S&P 500 and 5.2% for the Nasdaq Composite.

Stocks to trend higher
"The macro and fundamental background are favourable for stocks, and we expect equities to trend higher as we head into 2017," US Bank Wealth Management chief equity strategist Terry Sandven told Reuters.

"Investors are encouraged by expectations that [US president-elect Donald] Trump and a GOP-controlled Congress will enact pro-growth policies and we're seeing modest inflation creep in, while housing remains stable and wages continue to firm."

Shares of Exxon Mobil rallied 2.4% higher after Mr Trump nominated chief executive Rex Tillerson to be his secretary of state.

Bond prices slid as investors geared up for the Federal Reserve's first interest rate hike in a year. Its Open Market Committee began its two-day policy meeting and is expected to announce a rate increase tomorrow.

Yields on the 10-year US Treasury note edged higher to 2.479% from 2.478% on Monday.

Valuation warning
Meanwhile, a US financial watchdog warned about high valuations.

"Valuations are high in some key asset classes," the Office of Financial Research says in its 2016 Financial Stability report.

"The cyclically adjusted price-to-earnings ratio has only reached its current level prior to the three largest equity market declines in the last century.

"We continue to see important downside risks to US growth, though that alone does not threaten financial stability," the report says. "Specifically, slow global growth and the strong dollar continue to put pressure on US corporate earnings."

In Europe, the Stoxx 600 Index ended the session with a 1.1% climb from the previous close. Germany's DAX Index increased 0.8%, France's CAC 40 Index rose 0.9%, while the UK's FTSE 100 Index added 1.1%.

"We see earnings momentum and critically revenue momentum as stabilising," UBS strategists led by Nick Nelson wrote in a Tuesday note, Bloomberg reported.

"We stick with a slight tilt to cyclicals in our sector strategy, but would refrain from chasing all cyclicals here."

(BusinessDesk)