Big dividend payers lead indexes higher in quiet trading
US stocks edged higher on 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 firms 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 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 multi-year highs in recent days, but they moved lower on Monday. That helped companies that pay large dividends, as 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%, to 19,883.06. The Standard & Poor's 500 index gained 4.46 points, or 0.2%, to 2,262.53. The Nasdaq composite added 20.28 points, or 0.4%, to 5,457.44. The Russell 2000 index of small-company stocks rose 7.49 points, or 0.5%, to 1,371.68.
Bond prices rose. The yield on the 10-year Treasury note slid to 2.54% from 2.6% late on Friday. That sent interest rates lower and affects the profits banks make from mortgages and other loans. Bank stocks lagged the market.
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 dollars, or 4%, to 30.30 dollars and power company NRG Energy rose 55 cents, or 4.5%, to 12.85 dollars.
Government bond yields have climbed over the last few months and have jumped since the election. Last week the yield on the 10-year note rose to its highest level in more than two years.
Technology and industrial stocks are trading around all-time highs and continued to rise on Monday. Microsoft added 1.32 dollars, or 2.1%, to 63.62 dollars, and software maker Adobe advanced 1.74 dollars, or 1.7%, to 105.29 dollars. Industrial companies also did better than the broader market. Boeing rose 1.68 dollars, or 1.1%, to 156.18 dollars. United Technologies, which makes elevators, jet engines and other products, picked up 2.30 dollars, or 2.1%, to 110.82 dollars.
Crude oil inched up 22 cents to 52.12 dollars a barrel in New York. Brent crude, the international standard, gave up 29 cents to 54.92 dollars a barrel in London. Energy companies took small losses. They are trading at their highest prices in about 18 months after a big six-week rally. Noble Energy lost 91 cents, or 2.2%, to 40.25 dollars and Baker Hughes skidded 66 cents, or 1%, to 65.73 dollars.
Disney climbed after Rogue One: A Star Wars Story brought in an estimated 155 million dollars in worldwide ticket sales in its first weekend. That was better than expected and the second-best December movie opening ever, after Star Wars: The Force Awakens last year. Disney rose 1.39 dollars, or 1.3%, to 105.30 dollars.
Insurance company Allied World Assurance will be bought by Fairfax Financial Holdings of Canada for 54 dollars a share in cash and stock, or 4.7 billion dollars. Its stock jumped 5.99 dollars, or 13.1%, to 51.76 dollars.
Electronic trading firm Virtu Financial slipped 65 cents, or 4%, to 15.55 dollars after Mr Trump said he plans to nominate the company's founder and chairman, Vincent Viola, for the position of secretary of the Army. Mr Viola, an Army veteran, is a former chairman of the New York Stock Exchange and owns the NHL's Florida Panthers. He is the second head of a publicly traded company expected to take a role in Mr Trump's administration, following Rex Tillerson, chief executive of Exxon Mobil, who has been nominated for secretary of state.
Former World Wrestling Entertainment chief executive Linda McMahon and CKE Restaurants CEO Andy Puzder are also expected to join the administration, as are Goldman Sachs president Gary Cohn and billionaire investor Wilbur Ross.
Virtu went public last April in an IPO that priced at 19 dollars a share. Its market capitalisation is around 600 million dollars.
The dollar fell to 117.24 yen from 118.01 yen late on Friday. The euro fell to 1.0404 dollars from 1.0433 dollars.
Gold rose 5.30 dollars to 1,142.70 dollars an ounce. Silver lost 13 cents to 16.09 dollars an ounce. Copper sank 7 cents, or 2.5%, to 2.50 dollars a pound.
In other energy trading, wholesale petrol rose 1 cent to 1.56 a gallon dollars. Heating oil remained at 1.67 dollars a gallon. Natural gas fell 2 cents to 3.39 dollars per 1,000 cubic feet.
The FTSE 100 index in Britain added 0.1% while Germany's DAX rose 0.2%. In France the CAC-40 was 0.2% lower. Japan's benchmark Nikkei 225 index slipped 0.1% while in South Korea the Kospi edged 0.2% lower and Hong Kong's Hang Seng shed 0.9%.