Trading quiet as Christmas nears
Investors turn attention to stocks that pay large dividends. Real estate, phone, utilities get boost.
With the Christmas holiday and the end of 2016 coming into view, U.S. stocks edged higher Monday as bond yields dropped and investors who sought income moved money into phone company and real estate stocks.
Technology and industrial companies rose, while energy companies skidded and health care stocks continued to lag the rest of the market.
Disney climbed after a strong opening weekend for “Rogue One: A Star Wars Story,” its second movie in the revived “Star Wars” franchise.
Trading volume was the lowest since mid-October, except for the abbreviated trading session after the Thanksgiving holiday. Stocks were on track for larger gains early in the day and the Nasdaq was briefly on pace for a record high, but investor enthusiasm waned by the afternoon.
David Lefkowitz, senior equity strategist at UBS Wealth Management Americas, said that stocks have surged since the presidential election and investors might be more cautious in the weeks to come as they wait for details of President-elect Donald Trump’s policy agenda.
“We’re going to have to move from the grand vision of things to actually getting some of these policies done,” he said.
Bond yields have surged to multiyear highs in recent days, but they moved lower Monday. That helped companies that pay large dividends, because they are often compared to bonds and are more appealing to investors when yields fall.
The Dow Jones industrial average rose 39.65 points, or 0.2 percent, to 19,883.06. The Standard & Poor’s 500 index gained 4.46 points, or 0.2 percent, to 2,262.53. The Nasdaq composite added 20.28 points, or 0.4 percent, to 5,457.44. The Russell 2000 index of small-company stocks rose 7.49 points, or 0.5 percent, to 1,371.68.
Bond prices rose. The yield on the 10year Treasury note slid to 2.54 percent from 2.60 percent late Friday.
Income-seeking investors turned their attention to groups of stocks that pay large dividends, similar to bonds. That sparked gains for real estate, phone and utility companies. Health care facility investor HCP gained $1.16, or 4 percent, to $30.30 and power company NRG Energy rose 55 cents, or 4.5 percent, to $12.85.
Crude oil inched up 22 cents to $52.12 a barrel in New York. Brent crude, the international standard, gave up 29 cents to $54.92 a barrel in London. Energy companies took small losses.