Indexes reach all-time highs

The Dow Jones industrial average returned to a record Monday, joining other market gauges at all-time highs, as the stock market’s rally carried into a fifth week.

Oil producers and banks — along with other “cyclical” stocks that do well when the economy is strengthening — again led the way. It’s a notable shift in leadership after months of struggles for those stocks, which lagged because of worries about trade wars and the slowing global economy.

Behind their resurgence are rising hopes that the United States and China are making progress in negotiations on their trade dispute, or at least that they’re no longer making it worse.

Reports last week also showed that the job market is continuing to grow, corporate profits aren’t doing as badly as Wall Street expected and interest rates will probably remain low for a while.

Even in manufacturing, which has been hit particularly hard by President Trump’s trade war, investors saw some hopes that things may be hitting bottom soon.

The Dow climbed 114.75 points, or 0.4%, to 27,462.11, surpassing its prior all-time high set in July.

The Standard & Poor’s 500 index rose 11.36, or 0.4%, to 3,078.27. The Nasdaq composite climbed 46.80, or 0.6%, to 8,433.20. Those are new record highs for both indexes.

The biggest decliner in the S&P 500 was Under Armour. The athletic apparel company’s Class A shares plunged 18.9% after it said it had been cooperating with regulators for two years on an investigation into its accounting practices.

The indexes’ gains show “investors are doing what we’re theoretically supposed to be doing: We’re looking out at the next 12 to 18 months and investing on the basis of where it’s going, not on where we’re at today,” said Tom Stringfellow, chief investment officer at Frost Investment Advisors.

“We are investing on expectations that whatever the worst is, we’re there now.”

All that optimism could wash away quickly if U.S.China trade talks take yet another turn for the worse, Stringfellow said. But, he said, investors probably need to see only incremental improvements.

Rising optimism was evident not only in U.S. stock indexes but also in higher yields for Treasurys.

The yield on the 10-year Treasury climbed to 1.77% from 1.72%. And the gap between the yields of the 10year and two-year Treasurys widened, which many on Wall Street see as a sign of confidence in the economy.