Dow, S&P 500 reach new highs
Wall Street’s winning streak extends on broad gains from banks and technology stocks.
A turbulent day on Wall Street ended in the record books Thursday as the Dow Jones industrial average climbed above 27,000 for the first time and the benchmark Standard & Poor’s 500 index closed at another alltime high.
Earlier on Thursday, the S&P 500 briefly moved above 3,000 for the second straight day before an early rally lost some of its momentum.
The market lost some ground after an auction of long-term U.S. government bonds failed to drum up strong demand. That pulled bond prices lower, sending yields sharply higher.
Banks and technology stocks led the broad gains, offsetting losses by real estate and communications services stocks.
The latest gains extended stocks’ winning streak to its third day. Stocks have been trending higher for much of the week as investors have grown more confident that, as soon as the end of this month, the Federal Reserve may cut interest rates for the first time in a decade.
“Sure, 27,000 is just a number and in the whole scope of things isn’t meaningful,” Ryan Detrick, senior market strategist for LPL Financial, said of the Dow’s milestone. “What it is, though, is a reminder for all investors that this bull market has ignored all the scary headlines for years and the dual benefit of fiscal and monetary policy could mean it has a lot longer to go than most expect.”
The S&P 500 rose 6.84 points, or 0.2%, to 2,999.91. The index set three straight record highs last week.
The Dow advanced 227.88 points, or 0.8%, to 27,088.08. The Nasdaq composite slipped 6.49 points, or 0.1%, to 8,196.04. The Russell 2000 index of smaller-company stocks fell 7.13 points, or 0.5%, to 1,557.92.
Stocks rose from the getgo Thursday as investors looked ahead to Fed Chairman Jerome H. Powell testifying before a congressional committee for the second straight day.
Powell emphasized that the Fed is prepared to cut interest rates if needed to support the economy, raising hopes that the first reduction in its key policy rate in a decade could happen this month.
“Uncertainties around trade tensions and concerns about the strength of the global economy continue to weigh on the U.S. economic outlook,” Powell said.
The surge in bond yields hurt real estate, utilities and other high-dividend stocks that lose their appeal when bond yields rise. Real estate investment trusts took the heaviest losses. Iron Mountain shares slid 7.5%.
Banks benefited from the surge. Bank of America shares rose 1.2%. Goldman Sachs shares gained 2.6%.
Pharmaceutical makers dropped after the White House scrapped a plan to overhaul a system of rebates those companies pay to insurers and distributors. Merck dropped 4.5%.
The move gave drugstore chains and health insurers a boost, however. Cigna surged 9.2%, CVS Health gained 4.7%, and UnitedHealth and Anthem both rose 5.5%.
Traders also weighed a mix of corporate earnings reports. Delta Air Lines and aviation maintenance company AAR notched gains after their latest quarterly results topped Wall Street’s forecasts. Bed Bath & Beyond and Fastenal slumped on disappointing results.
Benchmark crude oil fell 23 cents to $60.20 a barrel. Brent crude oil fell 49 cents to $66.52 a barrel. Wholesale gasoline fell 2 cents to $1.99 a gallon. Heating oil slipped 1 cent to $1.98 a gallon. Natural gas fell 2 cents to $2.42 per 1,000 cubic feet.
Gold fell $5.80 to $1,404.30 an ounce. Silver fell 8 cents to $15.07 an ounce. Copper fell 1 cent to $2.68 a pound.