S&P 500 rises on financial stocks
NEW YORK — The benchmark US S&P 500 index and the Nasdaq index rose on Monday as a jump in 10-year bond yields boosted financial sector stocks and investors anticipated continued strength in corporate earnings and US economic growth.
The financial sector stock index rose 1.3% after 10-year US Treasury yields climbed to their highest level in five weeks. The Federal Reserve was seen as likely to continue raising interest rates despite criticism from President Donald Trump.
“Yields are climbing across the board, which is a sign of a strengthening economy,” said Oliver Pursche, chief market strategist at Bruderman Asset Management in New York. “And earnings have been very strong.”
Analysts now forecast profit growth of about 22% for the second-quarter earnings season, up from 20.7% at the start of the month, according to Thomson Reuters I/B/E/S.
News of ongoing trade talks helped US stocks edge upward. Mexican President-elect Andres Manuel Lopez Obrador sent Mr. Trump a letter urging a quick wrap-up of North American Free Trade Agreement trade negotiations, and trade officials from Mexico and the United States will meet later this week.
Also, European Commission President Jean-Claude Juncker is scheduled to meet with Mr. Trump on Wednesday over the imposition of import tariffs, though he will not arrive in Washington with a specific trade offer.
The Dow Jones Industrial Average fell 13.83 points or 0.06% to 25,044.29; the S&P 500 gained 5.15 points or 0.18% to 2,806.98; and the Nasdaq Composite added 21.67 points or 0.28% to 7,841.87.
But some investors worried about the effects of international trade tensions on the US dollar, which has climbed in recent months. Several US multinationals are reevaluating their currency hedging strategies.
Shares of Illinois Tool Works, Inc. fell 7.2%, contributing to the S&P 500 industrial sector’s 0.60% decline. The machinery parts maker cut its full-year earnings forecast, joining Netflix, Inc. in blaming the strong dollar for the cut.
Amazon. com, Inc. slipped 0.60% and was the biggest drag on the Nasdaq and the S&P 500 after Trump renewed his attacks on the retailer.
Shares of Alphabet, Inc. rose more than 4% in after- hours trading after the internet giant reported quarterly results.
Hasbro, Inc. shares jumped 12.9%, the most in the S&P 500, after posting upbeat results. Rival Mattel, Inc gained 3.9%.
Tesla, Inc. shares fell 3.3% after a report that the company has asked some suppliers to refund previous payments by the company in a bid to turn a profit.
Shares of oilfield services provider Halliburton Co. sank 8.1% as investors focused on growing pipeline constraints in the Permian Basin.
LifePoint Health, Inc. shares soared 35.5% and lifted shares of hospital operators after the company agreed to be bought by Apollo Global Management in a deal valued at about $5.6 billion.
Declining issues outnumbered advancing ones on the NYSE by 1.38 to one; on Nasdaq, a 1.06-to-one ratio favored decliners. The S&P 500 posted 27 new 52-week highs and six new lows; the Nasdaq Composite recorded 112 new highs and 53 new lows. Volume on US exchanges was 5.50 billion shares, compared to the 6.16 billion average for the full session over the last 20 trading days.