Wall Street extends rally, but some investors wary

Wall Street rose on Tuesday as a post-election rally extended into the new year, even as some investors warned they need to see results from President-elect Donald Trump before pushing stock prices significantly higher. U.S. stocks have surged over the past two months on expectations that Trump will stimulate the economy with tax cuts and infrastructure spending and slash regulations in the financial industry.

Now with the Dow Jones Industrial Average trading near the never-before-reached 20,000 mark, some investors say additional strong gains are unlikely in the short term. They want to see evidence that Trump’s campaign-trail promises will be approved by Republican lawmakers concerned about widening the federal budget deficit.

The S&P 500 rose by over 1 percent on Tuesday before giving up most of those gains, suggesting the rally is losing steam, said Warren West, principal at Greentree Brokerage Services in Philadelphia.

“The president-elect can’t just wave a magic wand. He has to deal with Congress, and Congress hasn’t proved to be able to agree with itself,” West said.

The Dow came within a hair’s breadth of the historic 20,000 milestone in December but it has since fallen back. The average rose to as much as 19,938.53 earlier in the session on Tuesday, helped by Walt Disney (DIS.N).

Ford Motor (F.N) rose 3.80 percent. The carmaker said it would cancel a planned $ 1.6 billion factory in Mexico and invest $ 700 million at a Michigan factory, after Trump had harshly criticized the Mexico investment plan.

Oil prices hit 18-month high before turning negative. The S&P energy index .SPNY rose 0.53 percent, with Kinder Morgan (KMI.N) up 3.6 percent. The U.S. dollar touched a 14-year high after data showed U.S. factory activity accelerated to a two-year high in December.

At 2:42 p.m. ET, the Dow Jones Industrial Average .DJI was up 0.17 percent to 19,795.71 points and the S&P 500 .SPX had gained 0.38 percent to 2,247.41.  The Nasdaq Composite .IXIC added 0.32 percent to 5,400.56. The S&P health index .SPXHC rose 1.06 percent. The S&P utilities index .SPLRCU dipped 0.39 percent. Advancing issues outnumbered declining ones on the NYSE by a 1.99-to-1 ratio; on Nasdaq, a 1.17-to-1 ratio favored advancers. The S&P 500 posted 17 new 52-week highs and 1 new lows; the Nasdaq Composite recorded 112 new highs and 21 new lows.