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While you were sleeping: UPDATED Wall St mixed as Dow stays above 20,000

Margreet Dietz
Fri, 27 Jan 2017

Wall Street was mixed, even as the Dow hit a fresh record high, amid disappointing corporate earnings such as from Qualcomm and Caterpillar.

The Mexican peso fell after President Pena Nieto cancelled a meeting with his US counterpart, Donald Trump, as tensions between the two countries grew over the latter's plan to build a border wall.

The US dollar strengthened. Even so, its gains may be limited in the months ahead.

"Markets were very long dollars heading into year-end and the prevailing assumption was that it was clearly going to the moon," Ned Rumpeltin, the European head of foreign-exchange strategy at Toronto Dominion Bank, told Bloomberg.

"It was inevitable for the pendulum to swing back. What is interesting is that the dollar has been still on a weak footing while real rates appear to have bottomed, That suggests that positioning remains a key element near term."

Wall Street seesawed. At the close the Dow Jones Industrial Avergae gained 32.40 points, or 0.2%, to 20,100.91. The Nasdaq Composite Index fell by just one point to 5655.18, while the Standard & Poor's 500 Index slipped 0.07% to 2296.68.

The Dow rose as high as a record 20,125.58 earlier in the session, boosted by gains in shares of UnitedHealth Group and those of DuPont, up 1.5% and 1.1% respectively. These outweighed declines in shares of Verizon and those of United Technologies, down 1.3% and 1% lower respectively.

Caterpillar loses grip
Shares of Caterpillar slid after the company posted a disappointing outlook, citing a challenging economic environment.

The company predicted sales and revenues in 2017 of between $US36 billion and $US39 billion with a midpoint of $US37.5 billion, it said in a statement.

Caterpillar reported full-year sales and revenues in 2016 of $US38.5 billion, down about 18% from $US47.0 billion in 2015.

The lowered outlook "is happening because business still stinks," Stephen Volkmann, a New York-based analyst for Jefferies, told Bloomberg. "The recovery is certainly not happening yet."

Shares of Caterpillar slid 1%.

"We continue to execute in a challenging economic environment and are focused on improving operating margins, profitability and shareholder returns," Caterpillar chief executive  Jim Umpleby said in the statement. "While we see signs of positive activity in some of our key end markets, the overall economic environment remains challenging."

Other disappointments
There were other disappointments.

Shares of Qualcomm fell 5% after the chipmaker posted quarterly revenue that grew less than expected.

Shares of Canada's Potash Corp of Saskatchewan slid after the producer of fertiliser reported quarterly earnings and an outlook that fell short of expectations amid weaker crop nutrient prices.

The stock traded 3.5% weaker in Toronto.

In Europe, the Stoxx 600 Index ended the day with a 0.3% advance from the previous close. Germany's DAX Index added 0.4%.

However, the UK's FTSE 100 Index slipped 0.04%, while France's CAC 40 Index fell 0.2%.

Shares of Switzerland's Actelion soared 19% after Johnson & Johnson agreed to buy the drugmaker for $US30 billion.


Margreet Dietz
Fri, 27 Jan 2017
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While you were sleeping: UPDATED Wall St mixed as Dow stays above 20,000