Dow Jones Continues on Record Setting Drive

As post-election rallies continue on the Dow Jones, the industry average goes above 19,000 and into record-setting territory as indexes climb further. The drive saw discount store chains receive large gains while health care companies dropped further.

After the record setting numbers on Monday, stock trading continued to climb, opening higher. After a weak performance by the medical company Medtronic, health care stock trading suffered. The retail stores Burlington Stores and Dollar Tree gained strong ground which saw the sector gain overall.

Ken Perkins, researcher at Retail Metrics, said that the average consumer is budget-conscious more so now than before.

The index of Standard and Poor 500 went up by 4.76 points or about 0.2%, reaching 2,202.94. The Dow jones went to 19,023.87, a 0.4% increase which equates to 67.18 points. The Nasdaq was up 0.3%, gaining 17.49 points to 5,386.35.

Smaller companies, tracked by the Russell 2000 index saw a 13th day of record setting numbers as it increased by 0.9%. Since the U.S. presidential election results which saw Trump winning, the Dow has had six record highs in a span on two weeks. In recent days, the trading volume has diminished with the Thanksgiving holiday closing the markets on Friday.

Discount stores saw many customers flock through their doors. Dollar Tree had strong results for their third quarter, raising their sales forecast and profits. Analysts were surprised at Burlington Stores larger profit, raising their outlook. Burlington Stores went up 16% to $86.04 while Dollar Tree went up 8.6% to $88.68.

Other retailers also saw gain with the consumer stock highs. TJX, Home Depot and Signet Jewellers rose with the gains seen in consumer stocks. Dollar Tree and other chains were able to get new clients after the Great Recession along with low-cost clothing chains such as TJX, according to Perkins of Retail Metrics.

Health care stocks are still struggling after taking losses from the weak Medtronic results, trading lower now than they did in the start of the year. Medtronic is one of the biggest medical device businesses in the world.

An analyst at UBS, Matt Miksic, said that investors are cautious after the weaker than expected results of Medtronic fearing that many similar medical companies will have weak growth. The weak sales that Medtronic saw was in almost every category in the United States, said Miksic. The company’s stock fell 8.7% to $73.60 while other health care companies such as Johnson and Johnson dropped 2% to $112.74. Further losses were seen by Abbot Laboratories losing as much as 4.2% to their current $38.10.

Losses in the medical field saw companies such as Patterson Cos. Touch three-year lows after the company’s dental business reported difficulties in the second quarter along with their animal health sector weakening due to weak prices on certain brands. Share of the company dropped by 16.7% to $39.56.

The parent company Campbell Soup grew profits in the first quarter going better than expected due to snacks such as Pepperidge Farm doing well and lowering expenses. The current fiscal year also saw the makers of Spam, Hormel report good results – better than its other refrigerated food business, Jennie-O turkey. Hormel went up 2.6% to $35.86 and Campbell Soup raised by 3.6% to $57.02.

The Snapple Group announced that it will buy Bai Brands, a maker of fruit drinks, for $1.7 billion. The Bai Brands drink makers approach their drink making differently by not using artificial sweeteners and having overall less calories than competitors. Snapple stocks gained 2.6% to their current $87.50.

Investors are still buying stocks of industrial companies on sites such as CMC Markets as aircraft parts and equipment showed continued gain in the markets. Northrop Grunman, Boeing and Lockheed Martin among other companies traded well before the election and now their stocks are doing well after the election results. Boeing gained 1.7% to $149.52 on Tuesday.

Oil and energy companies fell somewhat seeing Benchmark U.S. losing 21 cents to the barrel at $48.03. In London, Brent crude went up 22 cents a barrel to $49.12. Oil prices rose by 4% earlier in the week.

Short-term bonds continue to sell, driving their prices lower while longer-term bonds remained at their current prices.

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