NEW YORK — U. S. stocks climbed Wednesday as investors bought shares of companies focused on consumers, including automakers and retailers. The Standard & Poor’s 500 index finished a single point below its all-time high.
General Motors and Ford jumped as car companies reported generally strong sales for the month of December. Companies that mine for metals and make chemicals and other materials climbed as the dollar receded a bit from its recent highs. Small-company stocks picked up where they left off in 2017 as the Russell 2000 index outpaced other major indexes and missed a record close by a whisker.
Investors snapped up consumer-focused stocks that haven’t done much celebrating since the election, like apparel and accessories retailers and discount store chains. Urban Outfitters is down about 11 percent the election and Gap has fallen almost that much.
“They were afterthoughts in a lot of respects,” said Julian Emanuel, an equity strategist for UBS. But Emanuel said he expects those stocks to rise this year because consumer confidence remains high.
The Dow Jones industrial average added 60.40 points, or 0.3 percent, to 19,942.16. The blue-chip index was held back by small losses from Exxon Mobil and insurer Travelers.
The S&P 500 jumped 12.92 points, or 0.6 percent, to 2,270.75. The Nasdaq composite rose 47.92 points, or 0.9 percent, to 5,477. The Russell 2000 outpaced the other indexes and advanced 22.46 points, or 1.6 percent, to 1,387.95.
Companies that sell clothes, jewelry, athletic gear and discount goods have fallen or lagged behind the market over the last two months. That changed a bit on Wednesday. Gap rose 72 cents, or 3.1 percent, to $24.20. Discount retailer Dollar Tree, which has slumped since late November, picked up $2, or 2.6 percent, to $79.45.
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Asian stock indexes were mixed Thursday as investors assessed the latest Federal Reserve board’s meeting minutes. Japanese shares slipped as the yen strengthened against the dollar.
KEEPING SCORE: Japan’s benchmark Nikkei 225 index fell 0.3 percent to 19,544.70 a day after hitting its highest level in 13 months as the yen’s strength hurt shares of some exporters. South Korea’s Kospi edged 0.1 percent lower to 2,043.16 but Hong Kong’s Hang Seng rose 1 percent to 22,363.50 and the Shanghai Composite index in mainland China added 0.1 percent to 3,160.50. Australia’s S&P/ASX 200 climbed 0.4 percent to 5,758.30. Benchmarks in Taiwan, Singapore, Indonesia and the Philippines also advanced.
FED MINUTES: U. S. central bank officials think they may need to accelerate interest rate hikes if a faster-growing economy leads to lower than expected unemployment. For now they believe they can maintain stick to gradual increases, according to minutes of the Fed’s December meeting. Officials also discussed the impact of Donald Trump’s proposed economic stimulus program and attributed surging stock prices, rising bond rates and the stronger dollar following the election to investor enthusiasm about the president elect’s plans.
QUOTEWORTHY: „The Fed, like everyone else in the market, have full focus on the execution of Trump’s fiscal program and see upside risks to their forecasts if it comes off,“ said Chris Weston, chief strategist at IG Markets in Melbourne. „That is a sizeable ‚if‘ because… much needs to go right. “
WALL STREET: The Dow Jones industrial average added 0.3 percent to 19,942.16. The S&P 500 jumped 0.6 percent to 2,270.75. The Nasdaq composite rose 0.9 percent to 5,477.
CURRENCIES: The dollar slipped to 116.50 yen from 116.64 yen. The euro weakened to $1.0520 from $1.0526.
ENERGY: Oil’s rally fizzled out in Asian trading. Benchmark U. S. crude shed 14 cents to $53.12 a barrel in electronic trading on the New York Mercantile Exchange. The contract picked up 93 cents, or 1.8 percent, to settle at $53.26 a barrel on Thursday. Brent crude, used to price international oils, lost 19 cents to $56.27 a barrel in London.

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U. S. stocks have rallied since the election, but it’s time for investors to start thinking about getting out, possibly timed for President-elect Donald Trump ’s inauguration, Morgan Stanley said.
„We are worried that there is arrogance in telling people that they should be worried, but to stay bullish for now,“ Morgan Stanley said in a note dated Tuesday.
„Part of us thinks we should just sell the inauguration. After all, what incrementally positive and exciting outcomes could be produced in the first few weeks after that? “
The U. S. banking giant’s research arm noted that it had remained optimistic on U. S. equities for several years, even as it expected low earnings growth and some valuation-multiple expansion. But now, it expects „material“ earnings growth and multiple contraction.
The rally since Trump’s surprise win has been sizeable. The Dow Jones industrial average has gained around 9 percent, to a hair’s breadth from the 20,000 mark. The S&P 500 is up around 6 percent, tapping record highs.
„To us, it is WHEN, not IF we should fade this recent reflation trade,“ it said.
Morgan Stanley set its base-case target for the S&P 500 at 2300 at end-2017, marking 16.2 times its 2018 earnings forecast, compared with Tuesday’s close at 2257.83.
The bank said pointed to a lack of policy visibility ahead for its middling view.
„We can’t help but think that the Republican sweep has created a more uncertain and volatile outlook for the economy and corporate earnings growth,“ it said, citing risks from a more hawkish Federal Reserve, China’s economic slowdown, a much stronger dollar and European political uncertainty.
Analysts have broadly cited an unprecedented level of policy uncertainty heading into a Trump administration, not simply on what campaign promises would actually be pursued and which will prove to be merely aggressive rhetoric, but also what could pass through Congress.
Trump’s rhetoric on the campaign trail included promises of tax cuts for individuals and companies as well as substantial infrastructure projects, which appeared set to boost the government’s deficit spending.
Morgan Stanley said there was clearly a lot of earnings uncertainty ahead, but it still forecast that the S&P 500 earnings would be about 18 percent higher in 2018 than in 2016.
But it noted that the biggest driver of that increase – more than 50 percent of it — would come from Trump’s promised corporate tax cut to 20 percent from 35 percent. Another 30 percent of the earnings rise over the next two years would likely come from fiscal stimulus and nearly 27 percent from acceleration in share buybacks, it added.
The figures add up to more than 100 percent as other factors, such as a stronger dollar and higher interest-rate costs, will hurt earnings.
„Any tax-related gridlock will be bad for markets,“ it said in the note.
Additionally, Morgan Stanley noted a risk that companies could „compete away“ any tax benefits by passing the benefits to consumers, such as by lowering prices, rather than to shareholders.
Based on its expectation that the time to fade the U. S. stock rally was nearing, Morgan Stanley changed its sector recommendations for its portfolio.
Industrials were cut by Morgan Stanley to equal-weight from overweight, saying that after a rally fueled by „rebuild America“ dreams, it was time to take profit.
However energy was upgraded energy to overweight from equal-weight, citing a continued recovery in exploration and production activity and oil services demand. Technology was also upgraded to equal-weight from underweight, noting it took a 3 percent position in Activision Blizzard on its high-quality gaming assets.
But it further lowered its exposure to consumer discretionary plays, cutting its position on Starbucks as it faced growing competition and on Rubbermaid-maker Newell Brands. The bank said it expected consumer discretionary sector multiples would contract more than the broader market as interest rates rise.
It stayed equal-weight on the financial sector, but added a 2 percent position in Wells Fargo and removed 1 percent positions in Capital One Financial and BlackRock .
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WASHINGTON — President-elect Donald Trump on Wednesday chose a Wall Street attorney with experience in corporate mergers and public stock launches as his nominee to head the Securities and Exchange Commission.
Trump announced his nomination of Jay Clayton, a partner in the law firm Sullivan and Cromwell, as chairman of the independent agency that oversees Wall Street and the financial markets. If confirmed by the Senate, his responsibilities will include enforcing the scores of rules already written by the agency under the 2010 law that reshaped financial regulation after the 2008-09 crisis.
The law, known as Dodd-Frank, has long been scorned by Republicans and is high on Trump’s target list.
Clayton has worked on many of the securities deals that the SEC regulates and has represented Wall Street powerhouses including Goldman Sachs and Barclays.
He is the latest Trump choice with Wall Street connections. His nominee for Treasury secretary, Steven Mnuchin, is a former Goldman executive. Trump also has tapped Gary Cohn, until recently Goldman’s president, to be his top economic adviser, and billionaire investor Wilbur Ross to head the Commerce Department.
Clayton would succeed Mary Jo White, a former federal prosecutor who also had worked as a corporate attorney before being named SEC chair by President Barack Obama.
Clayton played a legal role in a raft of major deals. Some of the biggest came in the panicky days of 2008: He represented Goldman in billionaire Warren Buffett’s $5 billion investment in the Wall Street bank, and the teetering Bear Stearns in its rescue sale to JPMorgan Chase. He worked on a multitude of deals bringing companies public, notably the 2014 U. S. stock market debut of Chinese e-commerce giant Alibaba — the biggest IPO ever.
In announcing the appointment, Trump’s transition team said Clayton will encourage investment, „while providing strong oversight of Wall Street and related industries. “
„Robust accountability will be a hallmark of his tenure atop the SEC, and the financial security of the American people will be his top priority,“ the statement said.
But some key Democrats were unimpressed with the choice of Clayton.
„It’s hard to see how an attorney who’s spent his career helping Wall Street beat the rap will keep President-elect Trump’s promise to stop big banks and hedge funds from ‚getting away with murder,'“ said Sen. Sherrod Brown of Ohio, the senior Democrat on the Senate Banking Committee. The committee, with a Republican majority, will conduct Clayton’s confirmation hearing.
„I look forward to hearing how Mr. Clayton will protect retirees and savers from being exploited, demand real accountability from the financial institutions the SEC oversees, and work to prevent another financial crisis,“ Brown said in a statement.
Trump will be able to put an even broader stamp on the SEC. In addition to Clayton, he’ll have a chance to name two of the other four commissioners. The five-member body has been down two since December 2015. Two candidates nominated by Obama to fill vacancies, one Democrat and one Republican, have been stalled in Congress over whether they support requiring publicly traded companies to disclose their political spending.
Rather than offer quick remedies, the complex Dodd-Frank legislation laid down prescriptions for regulators to flesh out. The SEC was responsible for writing a large chunk of the nearly 400 required rules. Overall, federal regulators have completed about 70 percent of the rules more than six years after Dodd-Frank became law.
With Trump in the White House and Republicans in control of Congress, a major overhaul of the law is expected, if not an outright dismantling. Republicans also have been pushing the SEC to ease the rules for smaller companies to raise capital in the markets — an area related to Clayton’s experience.
„We will carefully monitor our financial sector, as we set policy that encourages American companies to do what they do best: create jobs,“ Clayton said in a statement.
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This story has been corrected to show that Gary Cohn was until recently president of Goldman Sachs, not currently.

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