Wall Street rises, buoyed by economic data; Dow sets high
Wall Street rose on Monday, with the Dow Jones industrials setting fresh record highs, as services sector data gave further evidence of strength in the domestic economy.
U.S. services sector activity hit a one-year high in November, with a surge in production boosting hiring, following on the heels of Friday’s employment report that showed strong job gains last month.
U.S. stocks have climbed since the Nov. 8 election, fueled by expectations of significant economic stimulus and cuts in corporate taxes and regulations under President-elect Donald Trump.
“A lot of people were negative going into the election, or cautious, so now they’re scrambling year-end to own stocks,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates Inc in Toledo, Ohio.
Lancz said U.S. investors on Monday also were encouraged by strength in European equities following Italy’s political referendum. Prime Minister Matteo Renzi was set to resign after suffering a resounding defeat over constitutional reform.
The Dow Jones industrial average rose 45.82 points, or 0.24 percent, to 19,216.24, the S&P 500 gained 12.76 points, or 0.58 percent, to 2,204.71 and the Nasdaq Composite added 53.24 points, or 1.01 percent, to 5,308.89.
The Dow, which closed at a record and minted a new intraday peak, has topped the other major indexes since the election, as investors have rotated into the financial and industrial sectors.
Financials gained 1.2 percent on Monday and were the best-performing major S&P sector. Goldman Sachs shares rose 2.3 percent after HSBC initiated coverage with a “buy” rating.
Monday’s economic data reinforced the view that the Federal Reserve is primed to raise interest rates next week, benefiting banks.
“We have a situation where the Fed is probably going to raise rates next week and this time raising rates is being viewed as a positive, mainly because of its impact on the financial stocks, which are all doing quite well today,” said Peter Tuz, president of Chase Investment Counsel in Charlottesville, Virginia.
Big tech names also lifted the S&P 500 and helped the Nasdaq outperform on Monday. Amazon.com rose 2.6 percent as it said it opened a brick-and-mortar grocery store in Seattle without lines or checkout counters.
Health insurers Aetna and Humana fell 3 percent and 2.2 percent, respectively, as a trial over their proposed merger kicked off. The health sector fell 0.2 percent and was the worst-performing group.
About 7.1 billion shares changed hands in U.S. exchanges, below the 7.9 billion daily average over the last 20 sessions.
Advancing issues outnumbered declining ones on the NYSE by a 2.59-to-1 ratio; on Nasdaq, a 3.14-to-1 ratio favored advancers.
The S&P 500 posted 52 new 52-week highs and 2 new lows; the Nasdaq Composite recorded 232 new highs and 29 new lows.
- Tank-fill tourism booms in Nepal
- Nepal eyes Qatari investments in energy, tourism
- World Bank Board approves $100 million to help deepen Nepal’s financial sector reforms
- Qatar Airways launching 5 flights a week to Nice
- Comprehensive reforms can help Nepal escape low-growth trap, says new World Bank report