By Sara Sjolin, MarketWatch , Ryan Vlastelica
EBay rallies after earnings
U.S. stocks edged higher on Thursday, with both the Dow and the Nasdaq squeaking out new highs, though investors mostly paused following a rally that pushed the Dow Jones Industrial Average past an important psychological milestone and other indexes to records.
Wall Street has been in rally mode since the U.S. election in early November, with investors betting that President Donald Trump would an advocate for policies, including massive corporate tax cuts and deregulation, which would accelerate economic growth.
While the rally has shown some signs of slowing of late, a round of positive corporate results on Wednesday gave credence to the idea that market levels were justified by economic fundamentals. That helped lift the Dow above 20,000 for the first time in its history (http://www.marketwatch.com/story/dow-stays-on-path-to-20000-milestone-ahead-of-key-earnings-2017-01-25). While that level holds no fundamental or technical significance, it was seen as psychologically important, and closing above it could augur for further gains ahead.
"We may have gone too far too fast, but we're fairly valued, not over or under," said Mark Foster, chief investment officer at Kirr Marback & Co., an investment advisory firm. "We need to see earnings come through, but we are starting to see that, and on top of that we have a new administration that is offering tax and regulatory relief, which is making people feel better about the market."
The Dow Jones Industrial Average rose 18 points to 20,089, a rise of less than 0.1%, while the Nasdaq Composite Indexrose 11 points to 5,668, a gain of 0.2%. The S&P 500 was unchanged on the day.
Read: President Trump cheers Dow 20,000 as only he can (http://www.marketwatch.com/story/president-trump-cheers-dow-20000-as-only-he-can-2017-01-25)
Economic news: In the latest economic data, the number of Americans who applied for unemployment benefits climbed by 22,000 to a one-month high of 259,000 (http://www.marketwatch.com/story/jobless-claims-jump-22000-to-259000-2017-01-26) in late January, but the level of layoffs remained extremely low.
There were no Federal Reserve speakers on tap as the central bank is in its so-called blackout period ahead of its policy-setting meeting on Jan. 31-Feb. 1.
Read:Dow hitting 20,000 is a reminder that it's the best active fund ever fashioned (http://www.marketwatch.com/story/the-dow-is-arguably-the-best-active-fund-ever-engineered-2016-12-22)
Earnings: Shares of eBay Inc.(EBAY) jumped 6.2% after the e-commerce company late Wednesday reported solid earnings from its holiday quarter (http://www.marketwatch.com/story/ebay-jumps-after-earnings-gain-in-holiday-shopping-quarter-2017-01-25).
On a downbeat note, Qualcomm Inc.(QCOM) fell 5.3% after the chip maker late Wednesday issued a weak second-quarter (http://www.marketwatch.com/story/qualcomm-slides-on-weak-second-quarter-outlook-2017-01-25) outlook amid ongoing legal and regulatory challenges.
U.S.-listed shares of Diageo PLC(DEO) climbed 3.3% after the maker of Johnnie Walker whiskey and Smirnoff vodka said half-year profit rose to GBP1.51 billion ($1.9 billion).
Shares of Dow Chemical Co.(DOW) gained 1.5%. The chemicals giant posted adjusted earnings well ahead of forecasts (http://www.marketwatch.com/story/dow-chemical-swings-to-loss-on-charges-2017-01-26).
Ford Motor Co.(F) fell 3.2% after the car maker reported a loss of $800 million in the fourth quarter (http://www.marketwatch.com/story/ford-reports-q4-loss-and-forecasts-full-year-2017-to-be-generally-lower-2017-01-26).
Comcast Corp.(CMCSA) jumped 2.1% following better-than-expected earnings.
Construction companies could be in focus a day after Trump issued an executive order to build a border wall with Mexico, saying construction could start within months (http://www.marketwatch.com/story/trump-in-abc-interview-wall-to-be-built-within-months-torture-absolutely-works-2017-01-25).
After the closing bell, Google parent Alphabet Inc (http://www.marketwatch.com/story/alphabet-earnings-google-may-shift-focus-to-cloud-as-search-business-slows-2017-01-25).(GOOGL) (GOOGL), Intel Corp (http://www.marketwatch.com/story/intel-earnings-holiday-pc-sales-could-save-the-quarter-2017-01-25).(INTC), Starbucks Corp (http://www.marketwatch.com/story/starbucks-earnings-us-same-store-sales-expected-to-be-key-driver-for-stock-price-2017-01-24).(SBUX) and Microsoft Corp (http://www.marketwatch.com/story/microsft-earnings-expect-bigger-shift-to-cloud-as-azure-closes-in-on-aws-2017-01-25).(MSFT) are expected to release results.
Other movers and shakers: Shares of Johnson & Johnson(JNJ) dropped 0.7% after the drugmaker agreed to buy Actelion Pharmaceuticals Ltd (http://www.marketwatch.com/story/johnson-johnson-to-pay-30-billion-for-actelion-2017-01-26).(ATLN.EB), Europe's biggest biotech company, for $30 billion. Actelion shares jumped 20% in Zurich.
Other markets: Major Asian stock markets closed higher across the board (http://www.marketwatch.com/story/asian-stocks-lift-off-after-dow-20000-2017-01-25), boosted by optimism over the Dow average reaching 20,000.
Markets in Europe were also rising (http://www.marketwatch.com/story/european-stocks-hang-at-1-year-high-buoyed-by-actelion-and-bank-shares-2017-01-26), setting the Stoxx Europe 600 index on track for its highest close since December 2015.
Read:From unloved tofavorite: Why European bank earnings are set to cheer investors (http://www.marketwatch.com/story/from-unloved-to-favorite-why-european-bank-earnings-will-cheer-investors-2017-01-25)
Oil prices rose 1.8%, while a stronger dollar (http://www.marketwatch.com/story/dollar-sticks-to-range-bound-trade-new-zealand-dollar-higher-2017-01-26) added pressure on gold , which fell 0.7%.
(END) Dow Jones Newswires
January 26, 2017 10:15 ET (15:15 GMT)
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