Stocks leap further into record territory
NEW YORK - Stocks around the world continued to push higher Monday, and U.S. indexes again hit records. Bond yields climbed.
The Standard & Poor’s 500 index rose 12.15 points, or 0.5%, to close at a record 2,328.25 and topped $20 trillion in market value for the first time ever. The Dow Jones industrial average rose 142.79 points, or 0.7%, to an all-time closing high of 20,412.16. The Nasdaq composite gained 29.83 points, or 0.5%, to a record 5,763.96.
Treasury yields also rose as the yield on the 10-year Treasury note rose to 2.43% from 2.41% late Friday. Two-year and 30-year Treasury yields also notched higher.
Mr. Market is Wall Street's $20 trillion dollar man
Roughly five stocks rose for every three that fell on the New York Stock Exchange. Financial stocks helped lead the way, and those in the S&P 500 rose 1.3%. That’s the largest gain among the 11 sectors that make up the index. Raw-material producers and industrial companies were also strong.
Stocks resumed their upward climb last week after stalling for a couple weeks. Strong earnings reports have helped drive the gains. The majority of companies in the S&P 500 that have reported fourth-quarter earnings so far, 69%, have beaten Wall Street’s expectations, according to S&P Global Market Intelligence. It’s mostly come through companies keeping control of costs better than analysts were forecasting.
Also underpinning the market’s gains in recent days have been encouraging reports on the strength of the economy and hopes that Washington will push through business-friendly policies.
Without any major economic reports or other big news on Monday, stocks are continuing to follow the path of least resistance, analysts say. The S&P 500 posted its fifth straight day of gains, and it’s already up 8.9% since Donald Trump won the White House in November.
“The market’s got such good momentum now that it’s going to continue until something slows it down,” said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research.
Several events are on the schedule that could shift the momentum. Federal Reserve Chair Janet Yellen will offer testimony on Capitol Hill Tuesday and Wednesday to update the Senate and House on monetary policy. Most investors expect the central bank to keep raising interest rates in 2017, though at a modest pace.
Yellen testimony could give clues on rates
The government will also offer updates on the state of inflation, on both the consumer and the wholesale levels. Many investors expect inflation to rise due to policies proposed by President Trump and Congressional Republicans, though the bond market doesn’t seem to be forecasting a runaway spike.
Apple rose 0.9% to close at a record high of $133.29. The stock’s performance carries extra weight for many 401(k) accounts because Apple is the biggest publicly traded company in the world. It accounts for about 3.5% of S&P 500 index fund investments.
Telecom stocks had some of the market’s sharpest losses, with those in the S&P 500 down 1.3%. That was the largest loss among the 11 sectors in the index.
Verizon introduced an unlimited-data plan to help it better compete with rivals. The worry is that more price wars may be coming for the industry. Verizon fell 0.9%. AT&T fell 1.8%, and Sprint lost 1.2%.
Stocks climbed in markets around the world. In Asia, Japan’s Nikkei 225 index rose 0.4 percent, the Hang Seng in Hong Kong gained 0.6 percent and South Korea’s Kospi index added 0.2 percent. In Europe, the French CAC 40 index jumped 1.2 percent, Germany’s DAX climbed 0.9 percent and the U.K. FTSE 100 added 0.3 percent.
Benchmark U.S. crude oil fell 93 cents, or 1.7 percent, to close at $52.93 a barrel. Brent crude, the international standard, fell $1.11, or 2.percent, to $55.59 a barrel.