Yesterday’s prognosticators predicted that last night’s speech would be very low on specifics and that investors wouldn’t care as long as it was very high on hope and optimism.  They were right.  The speech was very short on specifics and the markets were so bothered that re-energized investors went on a buying spree this morning pushing the Dow way up right out the gate and it pretty much stayed there all day closing with a huge 303 point gain and putting the index well past the 21,000 mark for the first time.  Welcome was the shift to a kinder and gentler Trump and a return to an era of good feelings.  The Fed helped too with remarks that a rate hike was likely coming in just two more weeks, a development that investors have taken as yet another sign of optimism that the Fed feels confident in the economy.  The manufacturing index was also reported at its highest since 2014.  The abundance of confidence and optimism also boosted volume to over 8 billion, way above the 6.9 billion average of recent weeks. 

BUSINESS NEWS | Wed Mar 1, 2017 | 4:51pm EST

Dow pierces 21,000 after Trump speech, rate-hike chatter

By Noel Randewich

DJ: 21,115.55  +303.31     NAS: 5,904.03  +78.59      S&P: 2,398.98  +35.34                3/1

(Reuters)  The Dow on Wednesday blasted through the 21,000 mark for the first time after U.S. President Donald Trump's measured tone in his first speech to Congress lifted optimism and investors viewed a looming interest rate hike as a glass half full.  The three main stock indexes surged more than 1.3 percent to close at record highs.

Trump on Tuesday said he wanted to boost the U.S. economy with a "massive" tax relief and make a $1 trillion push on infrastructure, bets that have helped Wall Street scale fresh records since the election.

But it was a break in Trump's often-abrasive speaking style that encouraged many investors who have worried he may struggle to push his agenda through a Congress reluctant to widen the government's budget deficit.

"People were concerned Trump was maybe running off the rails. After the speech last night everybody walked away with a good feeling," said Stephen Massocca, Senior Vice President at Wedbush Securities in San Francisco. "Some of the things he said, the algebra doesn't work but people know the direction it's going to go."

The S&P financial index .SPSY soared 2.84 percent, outperforming the other 10 major sectors, also helped by key Federal Reserve officials who hinted at an interest rate hike this month.

A March rate hike would be sooner than many investors expected and make it more expensive to borrow money to buy stocks but it would also signal policymakers' growing confidence in economic expansion after nearly a decade of tepid growth.

"It's not necessarily the rate increase that matters. It's that they're seeing things improving. If the Fed feels more confident, maybe we should too," said Warren West, principal at Greentree Brokerage Services in Philadelphia.

Adding to expectations of stronger economic growth, the Institute for Supply Management said its manufacturing index rose in February to its highest since 2014.

The perceived chances of a March rate hike also rose after the U.S. Commerce Department reported that January inflation ticked up by the most in four years.

Traders have now priced in a nearly 70 percent chance of a rate hike when the Fed's policy-setting body meets on March 14-15, according to Thomson Reuters data.

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The Dow Jones Industrial Average .DJI jumped 1.46 percent to end at 21,115.55, while the S&P 500 .SPX rallied 1.37 percent to 2,395.96. The Nasdaq Composite .IXICclimbed 1.35 percent to 5,904.03.

Seven of the 11 major S&P sectors gained more than 1 percent, including energy .SPNY, up 2.05 percent.

About 8.1 billion shares changed hands on U.S. exchanges, the most in 2017 and well above the 6.9 billion daily average for the past 20 trading days, according to Thomson Reuters data.

On Thursday, all eyes will be on the trading debut of Snap Inc, owner of popular messaging app Snapchat.

Despite having never turned a profit, Snap on Wednesday raised $3.4 billion in an initial public offering, giving it a valuation of $24 billion. That is the richest valuation in a U.S. tech IPO since Facebook in 2012.

During Wednesday's session, Lowe's (LOW.N) jumped 9.5 percent after the home improvement chain issued an upbeat sales forecast.

While corporate earnings have improved recently, stock valuations remain unusually high. The S&P 500 is trading near 18 times expected earnings, compared to its 10-year average of 14, according to Thomson Reuters Datastream.

Advancing issues outnumbered declining ones on the NYSE by a 2.08-to-1 ratio; on Nasdaq, a 3.05-to-1 ratio favored advancers.

The S&P 500 posted 140 new 52-week highs and five new lows; the Nasdaq Composite recorded 218 new highs and 38 new lows.