The Dow Jones Industrial Average today climbed higher thanks to another round of positive economic data and a soaring U.S. dollar.
The Dow is back within striking distance of 20,000 after a rally in telecom stocks. Nine of the 10 major S&P 500 sectors had gains on the day.
With the markets trading near historic levels at the start of 2017, investors are looking for the best investments when the market is high.
Here's our list of the five stocks to buy right now.
Let's look at the numbers from Tuesday for the Dow, S&P 500, and Nasdaq:
Dow Jones: 19,881.76; +119.16; +0.60%
S&P 500: 2,257.83; +19.00; +0.85%
Nasdaq: 5,429.08; +45.97; +0.85%
Now, here's a look at today's most important market events and stocks, plus a preview of Wednesday's economic calendar.
DJIA Today: Dow Back Within Striking Distance of 20,000
The Dow Jones gained 119 points thanks to a strong uptick in telecommunication stocks. Shares of Verizon Communications Inc. (NYSE: VZ) offered the biggest boost to the index.
It was a big day for the U.S. dollar, which hit a 14-year high during today's trading session. The gains came after the U.S. manufacturing sector grew more than analysts had expected in November. In addition, U.S. construction spending hit its highest level in more than 10 years and is expected to help bolster GDP growth in the fourth quarter. The U.S. Commerce Department said that construction spending increased 0.9% to $1.18 trillion. That is the highest amount since April 2006.
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The dollar will be in focus on Wednesday as the Federal Reserve prepares to release minutes from its most recent FOMC meeting. Investors are looking for clues into the timing of the central bank's next interest rate hike. The Fed has forecasted three rate hikes in 2017.
A stronger U.S. dollar weighed on crude oil prices, which hit a two-week low. The WTI crude oil price today dropped 2.6%, while Brent crude fell 2.4%. Earlier in the trading session, crude prices rose on increased optimism that OPEC members will commit to a deal to cap excessive production. Crude prices hit their highest levels since July 2015 before paring gains. Traders are increasingly concerned that Libya will bolster its production levels and contribute to a glut in supply at a time that OPEC and 11 non-OPEC nations are trying to press crude prices higher.
Despite the downturn in crude prices, energy stocks pushed higher on the day. Investors remain very optimistic on the impact of tax reform on the energy sector and President-elect Trump's plans for deregulation. Shares of Halliburton Co. (NYSE: HAL) led the way with a 2.6% gain. Exxon Mobil Corp. (NYSE: XOM) added 0.4% on the day, while its rival Chevron Corp. (NYSE: CVX) fell into negative territory.
Money Morning Global Energy Strategist Dr. Kent Moors has spent the last two weeks of 2016 putting together his 2017 oil price forecast for our readers. Last year, he set predictions for December 2016 for both WTI crude and Brent crude. Sure enough, both types of oil are trading in the range he projected. Now, he's setting his price targets in his 2017 oil forecast.
But the big story today is happening at General Motors Co. (NYSE: GM).
The U.S. auto giant was the latest target of President-elect Donald Trump, who said that the company must either make its products in the United States or face import tariffs.
This morning Trump tweeted, "Make in U.S.A or pay big border tax!"
Money Morning Chief Investment Strategist Keith Fitz-Gerald has developed a strategy for investors to take advantage of buying opportunities created by Trump's Twitter tantrums. Check out how you can make big money in 2017 by using this new, power investment strategy.
Top Stock Market News Today, Jan. 3, 2017
- While President-elect Trump was focusing on General Motors, the company's rival Ford Motor Co. (NYSE: F) announced it was scrapping its plans to build a production facility in Mexico. The firm said it will invest $700 million in the United States and create 700 new jobs. The company's CEO Mark Fields said the deal was a vote of confidence in Trump's economic polities. The company is also committing to electric vehicle production.
- Shares of Marathon Petroleum Corp. (NYSE: MPC) gained more than 5% after the energy giant announced plans to explore a spinoff for its retail business. The company has faced steep pressure to do so from activist hedge fund Elliott Management.
- Shares of Twitter Inc. (NYSE: TWTR) were up slightly despite news that another executive has called it quits. Kathy Chen, the executive who ran the company's Chinese division, has quit after just eight months on the job. Even more fitting, the executive sent a Tweet out marking her decision to depart from the company. Twitter is blocked in China, a rule that has been in place since 2009.
- Finally, sales in the legal marijuana industry are skyrocketing, which is why we've created a list of the five marijuana stocks to watch in 2017.
Wednesday's U.S. Economic Calendar (all times EST)
- MBA Mortgage Applications at 7 a.m.
- ADP Employment Report at 8:15 a.m.
- Gallup U.S. Job Creation Index at 8:30 a.m.
- Redbook at 8:55 a.m.
- Gallup US Consumer Spending Measure at 2 p.m.
- FOMC Minutes at 2 p.m.
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About the Author
Garrett Baldwin is a globally recognized research economist, financial writer, consultant, and political risk analyst with decades of trading experience and degrees in economics, cybersecurity, and business from Johns Hopkins, Purdue, Indiana University, and Northwestern.