Dow Jones sets record high as stocks close mixed; oil slumps

Daily Local News (West Chester, PA) - - WEATHER - By Alex Veiga AP Busi­ness Writer

Banks and other fi­nan­cial com­pa­nies led U.S. stocks mostly higher Thurs­day, pro­pel­ling the Dow Jones in­dus­trial av­er­age to a record high.

The Stan­dard & Poor’s 500 in­dex, a broader mea­sure of the stock mar­ket, also eked out a gain, adding to a big rally the day be­fore fol­low­ing Don­ald Trump’s pres­i­den­tial elec­tion vic­tory. The Nasdaq com­pos­ite closed lower, weighed down by a slide in tech­nol­ogy com­pa­nies. Bond prices slumped again, send­ing yields higher.

“You are see­ing a mas­sive swing out of cash and fixed­in­come and into eq­ui­ties to take ad­van­tage of this progrowth cy­cle that the mar­ket be­lieves we’re be­gin­ning,” said David Lyon, global investment spe­cial­ist at J.P. Mor­gan Pri­vate Bank.

The Dow climbed 218.19 points, or 1.2 per­cent, to 18,807.88. That’s a gain of about 1 per­cent from the av­er­age’s pre­vi­ous record high set on Aug. 15. The S&P 500 in­dex added 4.22 points, or 0.2 per­cent, to 2,167.48.

The Dow and S&P 500 in­dex are on a four-day win­ning streak. The tech-heavy Nasdaq lost 42.28 points, or 0.8 per­cent, to 5,208.80.

In­vestors con­tin­ued to make moves based on the bevy of pos­si­ble pol­icy changes that the Trump ad­min­is­tra­tion could im­ple­ment once it takes over in Jan­uary. Those in­clude cut­ting taxes, in­creas­ing in­fra­struc­ture spend­ing and slash­ing govern­ment reg­u­la­tion of busi­nesses.

That’s par­tic­u­larly given a boost to fi­nan­cial, in­dus­trial and health care stocks, while prompt­ing traders to sell con­sumer goods com­pa­nies, util­i­ties and phone com­pa­nies. In­vestors have also con­tin­ued to pull out of bonds in an­tic­i­pa­tion that Trump’s poli­cies could usher in stronger econ­omy and, pos­si­bly, higher in­fla­tion, both of which are bad for bonds.

The sell-off in bonds con­tin­ued Thurs­day, send­ing bond prices lower and kick­ing the yield on the 10-year Trea­sury note up to 2.15 per­cent, the high­est it’s been since Jan­uary, from 2.06 per­cent late Wed­nes­day. That yield is a bench­mark used to set in­ter­est rates on many kinds of loans in­clud­ing home mort­gages.

Traders have been sell­ing bonds more ag­gres­sively to hedge against the pos­si­bil­ity that in­ter­est rates, which have been ul­tra-low for years, could rise steadily again un­der Trump’s ad­min­is­tra­tion.

That sce­nario would fa­vor banks and other fi­nan­cial com­pa­nies, one rea­son why the sec­tor con­tin­ued to rally Thurs­day.

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