The Dow skyrocketed more than 250 points on Wednesday afternoon, hitting new intraday highs as traders waited for monetary policy announcements from the European Central Bank in which the ECB is expected to extend its stimulus program beyond the first quarter of 2017. The S&P 500 also posted gains, rising 0.97 percent to 2,233.6. The Nasdaq composite gained 0.92 percent. Telecommunications and real estate, widely known to pay the highest dividend yields, showed the strongest sector gains while biotechnology and pharmaceutical stocks traded downward.
The S&P 500 posted 86 new 52-week highs versus 7 new lows on Wednesday, while the Nasdaq composite showed 305 new highs and 26 new lows. Though some analysts are expecting a correction in the coming days or weeks, many others still believe that Donald Trump’s proposed stimulus plans will continue to propel the market forward and will extend the rally into the new year.
Data out on Wednesday showed that interest rates on U.S. fixed-rate mortgages hit their highest levels in more than two years which sent weekly home loan applications to its weakest point since the start of 2016. The Mortgage Bankers Association noted that 30-year-fixed-rate conforming mortgages are now averaging around 4.27 percent while 15-year -fixed-rate mortgages are averaging 3.53 percent.
Currencies Respond
The U.S. dollar dropped 0.21 percent on Wednesday against its major trading partners, hitting 113.9 yen and $1.075 to the euro. All eyes are now on the Federal Reserve announcement expected next week in which it is largely anticipated that U.S. interest rates will be raised.