4 Min Read
* Dow on track for sixth straight weekly gain
* Nov. housing starts fall more than expected
* Indexes up: Dow 0.23 pct, S&P 0.21 pct, Nasdaq 0.26 pct (Updates to open)
By Tanya Agrawal
Dec 16 (Reuters) - U.S. stocks opened higher on Friday, with the three major indexes on track to post weekly gains and the Dow within spitting distance of 20,000, a level it has never breached.
The Dow came within 50 points of hitting the historic mark on Thursday and is on track for its sixth weekly gains, a day after the Federal Reserve raised interest rates for the second time in nearly a decade.
The Fed sees three rate hikes next year instead of the two foreseen in September, partly as a result of the expected economic benefits under President-elect Donald Trump.
U.S. stocks have been on a tear since the Nov. 8 presidential election, with the S&P rising 5.7 percent on bets that Trump's plans to deregulate sectors and increase infrastructure spending will boost the economy.
"Investors are looking to the next year. They expect a rollback in regulation and some sort of fiscal stimulus that will help support growth," said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.
"If the Fed is being more aggressive in raising rates, it's a sign that they are more confident the economy is improving."
However, there are some concerns that the "Trump rally" may have gone too far too soon and that valuations are stretched. The S&P 500 is trading at 17.9 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.
The strengthening dollar has also stoked concerns about its impact on companies with overseas exposure. The dollar index , which measures the currency against a basket of currencies, is trading near a 14-year high.
"The dollar is rising and there's some talk on how that might mean some possible restraints on U.S. exporters. We have already seen global trade slowing down and that's without any real protectionist efforts," said Brown.
At 9:34 a.m. ET (1434 GMT) the Dow Jones Industrial average was up 46.17 points, or 0.23 percent, at 19,898.41.
The S&P 500 was up 4.91 points, or 0.21 percent, at 2,266.94.
The Nasdaq Composite was up 14.20 points, or 0.26 percent, at 5,471.05.
Nine of the 11 major S&P sectors were higher, with the utilities index's 0.61 percent rise leading the gainers.
U.S. homebuilding fell more than expected in November, with groundbreaking on new housing projects dropping to 1.09 million units from October's 1.34 million-unit rate.
Oracle declined 2.5 percent to $39.82 after the business software maker's adjusted revenue missed analysts' estimates.
Jabil Circuit jumped 10.1 percent to $23.76 after the contract electronics maker's quarterly results beat expectations.
Agios Pharma slumped 17.3 percent to $46.26 after the drugmaker withdrew its investigational new drug application.
Advancing issues outnumbered decliners on the NYSE by 1,782 to 798. On the Nasdaq, 1,376 issues rose and 907 fell.
The S&P 500 index showed nine new 52-week highs and no new lows, while the Nasdaq recorded 34 new highs and seven new lows. (Reporting by Tanya Agrawal in Bengaluru; Editing by Anil D'Silva)