The Morning Journal (Lorain, OH)
U.S. stocks climb, led by health care, banks
U.S. stocks set more records Monday as health care companies and banks continued to surge.
U.S. stocks set more records Monday as health care companies and banks continued to surge as investors grew more optimistic about the recovery in manufacturers.
Stocks got a boost after the Institute for Supply Management said U.S. factory activity hit a 13year high in August as hurricanes disrupted supplies but drove up demand for manufactured goods. Investors snapped up shares of companies that are linked to more rapid economic growth, like banks and health care and industrial companies as well as smaller, U.S.-focused companies. High-dividend stocks, which are traditionally considered safer and more cautious investments, lagged the rest of the market. Energy companies missed out on the gains as investors worried that oil supplies are rising.
In the last few weeks, stocks have returned to the pattern they followed from the November presidential election to President Donald Trump’s inauguration in January: growth-oriented stocks have risen while the dollar has gotten stronger and bond yields have increased.
“We’ve seen this acceleration in global earnings growth over the last couple of months,” said Mark Hackett, chief of investment research at Nationwide Investment Management. “We’ve seen the rest of the world kind of pick up where the U.S. has been going.”
Hackett added that investors in the U.S. seem to have gotten more optimistic that a tax cut package and an infrastructure spending bill could pass a bitterly-divided Congress. That would strengthen the U.S. economy and corporate earnings.
The Standard & Poor’s 500 index rose 9.76 points, or 0.4 percent, to 2,529.12. The Dow Jones industrial average advanced 152.51 points, or 0.7 percent, to 22,557.60. The Nasdaq composite gained 20.76 points, or 0.3 percent, to 6,516.72. The Russell 2000 index of smaller-company stocks jumped 18.61 points, or 1.2 percent, to 1,509.47. All four indexes finished at record highs.
Leaders in health care included genetic testing equipment company Illumina, which gained $3.03, or 1.5 percent, to $202.23. Botox maker Allergan climbed $6.03, or 2.9 percent, to $210.98. Among industrials, General Electric jumped 39 cents, or 1.6 percent, to $24.57.
Oil prices dropped after oilfield services company Baker Hughes said last Friday that more drilling rigs went into operation last week after two weeks of declines, and Reuters reported that output of OPEC nations grew in September. Both of those reports suggest that oil supplies are rising.
Benchmark U.S. crude fell $1.09, or 2.1 percent, to $50.58 a barrel in New York. Brent crude, the standard for international oil prices, shed 67 cents, or 1.2 percent, to $56.12 a barrel in London.
Nordstrom slumped following a report that talks to sell the company to a group of investors including the Nordstrom family could fall apart. The New York Post reported that the would-be buyers are having trouble getting enough financing to complete the sale, and that the recent bankruptcy of retailer Toys R Us made that process harder.
Nordstrom stock fell $2.97, or 6.3 percent, to $44.18. Other department stores also fell on concerns about the value of the companies and their ability to raise money.
MGM Resorts stock fell after a man shot and killed at least 58 people and wounded more than 500 at a concert at MGM’s Mandalay Bay Hotel and Casino in Las Vegas. It’s the deadliest mass shootings in U.S. history. Police say the shooter was 64-year-old Stephen Paddock and that he shot and killed himself inside the hotel.
MGM Resorts lost $1.82, or 5.6 percent, to $30.77.
Gun manufacturers traded higher, as they often do following large shootings as investors wonder if the violence will lead to greater gun sales.