Dow Jones and S&P 500: US Indices Hit Records as Energy Sector Leads Rally Today

Wall Street Rallies to New Highs as Energy and Financial Stocks Surge

Wall Street is celebrating the start of the new year with a strong rally on Monday, led by a sharp rise by energy firms and soaring financial stocks.

At 16:48 GMT, the blue chip Dow Jones Industrial Average is trading 49089.41, up 707.02 or +1.46%. The benchmark S&P 500 Index is at 6916.63, up 58.16 or +0.85% and the tech-weighted Nasdaq Composite is trading 23465.244, up 229.615 or +0.99%.

Energy Stocks Surge on Venezuela Infrastructure Rebuild Hopes

Energy stocks moved to the forefront after a U.S. military strike over the weekend that captured Venezuelan President Nicolas Maduro. With Washington “running the country” according to President Trump, investors threw money at energy companies in anticipation of the country’s new leadership allowing U.S. firms access to the world’s largest oil reserves. Trump also added that a U.S. embargo on Venezuelan oil remained in full effect.

Leading the gains in the S&P 500 Index is Halliburton, up 9.696%, SLB, up 9.304% and Valero Energy, up 8.714%. Chevron, up 5.42% is helping to give the Dow a boost.

Financial Giants and Defense Contractors Post Strong Gains

Also impacting the Dow positively are financial giants Goldman Sachs Group and JPMorgan Chase, up 3.54% and 3.11%, respectively.

A bullish outlook for defense-related stocks after the military action this weekend is helping to boost shares of leaders Lockheed Martin (+2.5%) and General Dynamics (+2.8%).

Energy and Financials Lead Sector Performance

For a second session in a row, the Energy Sector is the biggest gainer, up 2.63%. This is followed by the Financials Sector, up 2.59%. Consumer Discretionary is another sector posting a gain of more than 2.0%. Technology is taking a backseat today to Energy, with a relatively small 0.20% increase.

“With the markets taking geopolitics in stride so far, the first trading week of the New Year may likely revolve around whether tech will find its footing after stumbling into the end of the year,” Chris Larkin, managing director, trading and investing, E*TRADE at Morgan Stanley, said in a note.

S&P 500 Rebounds From 50-Day Moving Average, Eyes Record High

After three days of losses, the S&P 500 Index is back on solid ground, in a position to challenge the all-time high at 6945.77. On Friday, the index planted a low at 6824.31, just above the key 50-day moving average at 6809.41, and never looked back. Continue to monitor the 50-day MA for trend direction.

Dow Jones Breaks to New Record High Above Key Support Levels

Earlier today, the Dow Jones Industrial Average gapped a pair of 50% levels at 48315.74 and 48174.65 and rocketed to a new record high at 49089.41. The 50% pivots are new support, but the major support and trend indicator is the 50-day moving average at 47267.04.

Market Outlook: Venezuela Developments Give Way to Jobs Data

All eyes will continue to be on Venezuela as investors bet on the new regime collaborating with the United States. Meanwhile, as the week wears on, traders will begin to focus less on geopolitics and more on the economy, led by Friday’s Non-Farm Payrolls report.

More Information in our Economic Calendar.