The Dow Jones Industrial Average rose for a 13th straight session, equaling its best winning streak on record as investors grow confident the economy will withstand the Federal Reserve’s efforts to quell inflation.
(Bloomberg) — The Dow Jones Industrial Average rose for a 13th straight session, equaling its best winning streak on record as investors grow confident the economy will withstand the Federal Reserve’s efforts to quell inflation.
An 8% rally in Boeing Co. lifted the blue-chip index to a 0.2% gain Wednesday. The planemaker’s cash generation in the second quarter far exceeded expectations, boosting shares enough to offset the drag from Microsoft Corp., which sank 3.8% after posting tepid quarterly sales growth. The 30-stock gauge has advanced more than 5% over the streak that began July 10. The broader S&P 500 Index is up 3.8% in that time. The Dow industrials last notched 13 consecutive advances in January 1987.
The latest gain came after the Fed raised rates by a quarter percentage point, as expected, and Chairman Jerome Powell signaled officials may be close to done with further increases. Corporate earnings have also bolstered sentiment in recent weeks, with the likes of Goldman Sachs Group Inc. and 3M Co. rallying after reporting results.
“The bulls are clearly in control,” said Adam Sarhan, founder of 50 Park Investments said in an interview, noting that stocks across banking and transportation to housing and semiconductors were rising. “Instead of the market pulling back, other areas are now going up — and that’s why the Dow is running.”
The Dow’s recent rally shows investors are steadily gaining confidence in the economy and are looking beyond the safety of mega-cap technology stocks that have powered most of the market’s gains in 2023. A look at the leaders in the Dow during the streak confirms a broadening of the rally. 3M, the materials company, has jumped 16% during the latest surge, while Goldman is up more than 13%. Home Depot Inc. has added 8.8%, and Intel Corp. gained 7.9%.
Bulls also took solace from the so-called Dow Theory, which holds that higher highs in the “old-economy” index and its counterpart, the Dow Jones Transportation Average, signal a sustained market advance. That combination is flashing a bright green sign to investors right now, with the transports rising 6.8% in the past 13 sessions to the highest since March 2022.
When both are “trending in the same direction, that is the path of least resistance for the broader stock market,” said Tom Essaye, a former Merrill Lynch trader who founded “The Sevens Report” newsletter.
–With assistance from Jessica Menton.
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