Monday, January 23, 2017
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Market Digest Online MONDAY, JANUARY 23, 2017: U.S. equities closed higher in choppy trade on Friday after Donald Trump took a protectionist tone in his first speech as president.

"We must protect our borders from the ravages of other countries making our products, stealing our companies, and destroying our jobs," Trump said after being sworn in. "Protection will lead to great prosperity and strength. I will fight for you with every breath in my body and I will never ever let you down."

The Dow Jones industrial average gained about 95 points after rising 111.54 points at session highs, with Procter & Gamble, Merck and IBM contributing the most gains. The blue-chips index also snapped a five-day losing streak.

The S&P 500 gained 0.3 percent, with telecommunications and materials leading advancers. The Nasdaq composite advanced 0.28 percent. The three major indexes had traded more than half a percent higher ahead of Trump's speech.

"He didn't decide to go high. He decided to go populist and protectionist, and that's something we're going to have to get used to. When you put together populism and protectionism, it has a lot of economic fallout. That's how he got here," said aid Art Hogan, chief market strategist at Wunderlich Securities. "We were going higher on the hopes of thing that take time to happen in Washington."

The broader stock market has rallied significantly since Trump's shocking electoral victory on the hopes of more government spending, lower corporate taxes and deregulation of some sectors. Stocks, however, have traded mostly sideways for the past month as investors look for more details about Trump's proposed policies.

The Trump administration will have to start delivering on these expectations for stocks to remain at current levels, said Naeem Aslam, chief market analyst at Think Markets. "Traders are no longer going to monitor his words closely, but the actual actions. The bigger question is if he can get the Congress to wear the same hat," he said.

Expectations for a stronger economy have not only been bolstered by policy hopes from the new administration, but also by the slew of better-than-expected economic data.

Weekly jobless claims remain around their lowest levels in decades, while the consumer price index rose 2.1 percent in December on a year-over-year basis. In fact, the Citi U.S. Economic Surprise index has risen to its highest level since 2014. A higher reading on the index indicates more positive economic data surprises.

Jeff Zipper, managing director of investments at the Private Client Reserve of U.S. Bank, said the economic backdrop is bullish for stocks. He added, however, "the market is definitely looking for some clarity" on Trump's policy plans.

The Dow Jones industrial average gained 94.85 points, or 0.48 percent, to close at 19,827.25, with Merck leading advancers and General Electric the biggest decliner. The S&P 500 rose 7.62 points, or 0.34 percent, to end at 2,271.31, with telecommunications leading nine sectors higher and industrials and health care lagging. The Nasdaq composite advanced 15.25 points, or 0.28 percent, to close at 5,555.33.

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