Dow Keeps Record High in Sight as Energy, Industrials Gain

© Reuters © Reuters

By Yasin Ebrahim – The Dow remained close to record highs on Wednesday led by energy and industrial sectors as bullish sentiment on stocks continues into the final days of the year.

The Dow Jones Industrial Average rose 0.42%, or 126 points to 30,463.16, just below its all-time high of 30,588.79. The S&P 500 was up 0.27%, while the Nasdaq Composite rose 0.27%.

Energy stocks rose more than 1% on the back of rising oil prices following a larger-than-expected weekly draw in U.S. crude inventories.

The Energy Information Administration reported Wednesday crude inventories for the week ended Dec. 25 fell by 6.1 million barrels, compared with forecasts for a 2.6 million barrel decline.

Occidental Petroleum (NYSE:OXY), HollyFrontier (NYSE:HFC) and Devon Energy (NYSE:DVN), were among the biggest gainers in energy, with the latter up almost 5%.

Caterpillar (NYSE:CAT), meanwhile, led industrials higher after heavy-equipment was hailed a "top 2021 idea" by Baird on signs of improving construction equipment demand and a possible jump in infrastructure spending next year as both sides of the political aisle have acknowledged the need for upgrades across the country.

Investor sentiment on stocks was also boosted by positive vaccine news after AstraZeneca (NASDAQ:AZN) said its Covid-19 vaccine, developed in partnership with Oxford University, had received approval for emergency use and could be rolled out as soon as Tuesday.

The step-up in the fight against the pandemic comes as official in Colorado believe they have found the second case of the more infectious coronavirus variant in the U.S., first identified in the UK, raising concerns about further restrictions.

In tech, meanwhile, Intel (NASDAQ:INTC) gave back some of its gains from a day earlier, falling 1%, following reports that hedge fund Third Point (NYSE:TPRE) took a $1 billion stake in the chipmaker. Third Point chief executive Dan Loeb reportedly urged the company to seek alternative strategies to boost its stock price.

On the political front, lawmakers looked set to vote on overriding President Donald Trump's veto the defense bill. The president vetoed the bill last week after previously flagging concerns about measures in the legislative proposal including one that offers protection to tech companies.

In other news, Tesla (NASDAQ:TSLA) gained 3% as Wall Street talked up the prospect of better-than-expected deliveries for 2020 ahead of the electric vehicle automaker's numbers next week.

Tesla is expected to surpass its target delivery of 500,000 electric vehicles in 2020 as it is forecast to beat Wall Street expectations of 163,000 deliveries in the fourth quarter, Credit Suisse (SIX:CSGN) said.

"While our expectation would require a record month for Tesla in December, we believe this is feasible given Tesla's typical quarter-end wave," it added.

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