LDN - Business

Dow set to crack 23,000-mark at open for the first time

[October 18, 2017] By Sruthi Shankar

(Reuters) - The Dow Jones Industrial Average was poised to open above 23,000 for the first time on Wednesday following a series of upbeat earnings reports from marquee companies.

The index briefly surpassed the milestone on Tuesday but closed 3 points short of the record level. The latest 1,000-point increase was covered in roughly half the time it took the index to move from 21,000 to 22,000.

Solid earnings and hopes that President Donald Trump may be able to make progress on tax cuts have helped the market rally this year.

"Looks like it's set for a good start, largely driven by strong earnings and positive economic growth," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

"We're in a sweet spot where the economy is growing not too strong and not too weak, the Fed's tightening but not too rapidly and earnings continue to expand. All the news is positive."

The dollar edged higher as markets awaited further news on the possible appointment of a hawk as the Federal Reserve chair and progress on tax reforms. [USD/]

Investors are also awaiting the Fed's issue of the Beige Book, a periodic snapshot on the health of the U.S. economy. The report, due at 2:00 p.m., will likely show if inflation pressures are accelerating.

The central bank still appears on course to raise interest rates again in December despite muted inflation. The odds of a December move stand at 96.7 percent, compared with 82.7 percent a week ago, according to CME Group's FedWatch tool.

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Traders work on the floor of the New York Stock Exchange (NYSE) in New York, U.S., October 13, 2017. REUTERS/Brendan McDermid

At 8:32 a.m. ET, Dow e-minis were up 92 points, or 0.4 percent, with 19,321 contracts changing hands.

S&P 500 e-minis were up 4 points, or 0.16 percent, with 100,122 contracts traded.

Nasdaq 100 e-minis were up 4.75 points, or 0.08 percent, on volume of 17,731 contracts.

A Commerce Department report showed U.S. homebuilding fell to a one-year low in September, hurt by the recent hurricanes, suggesting that housing probably remained a drag on economic growth in the third quarter.

Housing starts fell 4.7 percent to an annual rate of 1.127 million units. Economists polled by Reuters had forecast housing starts falling to 1.175 million units.

IBM <IBM.N>, a Dow component, jumped 5.81 percent in premarket trading, after the tech major revenue beat estimates and the company hinted at a revival in sales growth.

Abbott rose 1.71 percent after the company's profit beat estimates, driven by strong sales in its medical devices business.

Chipotle Mexican Grill slipped 2.82 percent after Bank of America Merrill downgraded the company's stock to "underperform" and slashed its price target by $105 to $285.

(Reporting by Sruthi Shankar in Bengaluru; editing by Saumyadeb Chakrabarty)

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