US stocks hit records as Dow flirts with 20,000 points

File: US stocks finished the week on a strong note with both the S&P 500 and Nasdaq closing at new records, bolstered by strong gains by large technology shares. Photo: FreeImages / myles davidson

NEW YORK - US stocks finished the week on a strong note with both the S&P 500 and Nasdaq closing at new records, bolstered by strong gains by large technology shares.

Wall Street also made its most audacious run yet at the 20,000-point milestone for the Dow Jones Industrial Average. The blue-chip index got to within 0.37 of a point at one stage Friday before retreating.

Earlier, European equities finished modestly higher, while the Nikkei in Japan dipped.

US stocks were mixed in early trading after the closely-watched employment report showed the US economy added 156,000 jobs in December, slightly below expectations. However, the report also upgraded the job estimate for November and said average hourly earnings rose to $26.00, up 10 cents from the prior month.

After a sluggish start, Wall Street investors found their mojo at mid-session, vaulting all three indices sharply higher and repeatedly taking the Dow to within 10 points of 20,000.

The surge appeared to be the result of underlying sentiment rather than a news trigger. Investors remain upbeat about the US economy in the aftermath of the elections, which raised expectations that President-elect Donald Trump will enact a pro-growth agenda, said Jack Ablin, chief investment officer at BMO Private Bank.

"I think it was just bullish sentiment," Ablin said.

The dollar pushed higher following the jobs report, which analysts said would keep the Federal Reserve on track to raise interest rates in 2017. The greenback had slumped on Thursday, in part due to worries about the jobs report.

- China boosts yuan -

China on Friday hiked the yuan against the dollar in its biggest one-day increase since 2005.

The People's Bank of China, which has been battling to shore up the sagging yuan, fixed the exchange rate at 6.8668 to the dollar, according to the country's foreign exchange market operator.

The 0.92-percent hike was the strongest daily increase since July 2005, and comes after the yuan recently flirted with the 7.0 to the dollar mark, a threshold not crossed in more than eight years.

China's currency has been under pressure from uncertainty over the health of the world's second-largest economy, massive capital outflows and the sharp rise in the dollar following Donald Trump's election victory and anticipation of US interest rate hikes.

Beijing allows the tightly controlled yuan to rise or fall only two percent on either side of the daily fix, to prevent volatility and maintain control over the currency.

China said last week it would almost double the number of foreign currencies it uses to determine the official value of the yuan, thereby diluting the role of the dollar as authorities seek to arrest the currency's fall and project an image of stability in the unit.

AFP

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