Wall Street rides on economic data
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. US service 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.
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.
US service 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.
EXPECTATIONS
US 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 yearend to own stocks,” said Alan Lancz, president of investment advisory firm Alan B. Lancz & Associates, Inc. in Toledo, Ohio.
Mr. Lancz said US 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%, to 19,216.24, the S&P 500 gained 12.76 points, or 0.58%, to 2,204.71 and the Nasdaq Composite added 53.24 points, or 1.01%, to 5,308.89.
The Dow, which closed at a record and minted a new intraday peak, has topped the other major indices since the election, as investors have rotated into the financial and industrial sectors.
Financials gained 1.2% on Monday and were the best performing major S&P sector. Goldman Sachs shares rose 2.3% 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% 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% and 2.2%, respectively, as a trial over their proposed merger kicked off. The health sector fell 0.2% and was the worst-performing group.
About 7.1 billion shares changed hands in US 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. —