Stocks hit records again, with tech giants back in charge
Apple and other big-name technology stocks got back to their winning ways on Monday and helped drive US indexes once again to record heights.
The Standard & Poor's 500 index rose 20.31 points, or 0.8%, to 2,453.46 and surpassed its old record, set nearly a week ago, by half a percent. The Dow Jones industrial average added 144.71 points, or 0.7%, to 21,528.99, and the Nasdaq composite jumped 87.25, or 1.4%, to 6,239.01.
Tech heavyweights, which had been among the stock market's biggest stars until recently, led the way.
After being up more than 20% for the year, tech stocks in the S&P 500 fell sharply two Fridays ago on worries that they had risen too much, too quickly. In a little more than a week, tech stocks lost about a fifth of their year-to-date gains.
On Monday, Apple rose for just the second time since two Thursdays ago. It jumped 4.07 dollars, or 2.9%, to 146.34 dollars for its second-best day of the year so far. Google's parent, Alphabet, rose 16.60 dollars, or 1.7%, to 975.22 dollars.
Altogether, tech stocks in the S&P 500 rose 1.7%, the largest gain among the 11 sectors that make up the index.
It is just the latest example of investors steeling themselves and "buying the dip".
Every time the stock market has shown any weakness in the last eight years, it has proven to be a good move for investors to buy.
That is because stocks have ended up erasing any losses incurred, only to move higher. That long track record has trained investors to pounce whenever they see a dip, and analysts have noticed how ingrained the instinct has become.
"It's concerning, but I don't see what breaks it at this point of time," said Nate Thooft, senior portfolio manager at Manulife Asset Management.
"It's going to be really, really hard to predict what that circumstance is. For the time being, investors are thinking, 'We can't afford not to be in this market, and we'll continue to play along with the dynamics of the gradual melt-up'."
Mr Thooft expects stocks to continue rising, even with prices high, because bonds look less attractive. Plus, profit growth is improving for companies, which helps to justify their stock price gains.
The biggest gainer in the S&P 500 Monday was PerkinElmer, which sells testing equipment and scientific instruments. It jumped 4.16 dollarsd, or 6.5%, to 67.73 dollars after it agreed to buy Euroimmun Medical Laboratory Diagnostics of Germany for 1.3 billion dollars in cash.
On the other end was energy company EQT, which fell 5.26 dollars, or 9%, to 53.51 dollars for the largest loss in the index. It agreed to buy Rice Energy for 6.7 billion dollars in cash and stock in a deal that EQT said will make it the country's largest producer of natural gas. Rice surged 4.88 dollars, or 24.8%, to 24.57 dollars.
Bond prices fell, which sent yields higher. The yield on the 10-year Treasury rose to 2.18 % from 2.15 % late Friday. The two-year yield climbed to 1.35 % from 1.31 % , and the 30-year yield ticked up to 2.79 from 2.77 % .
The dollar rose to 111.54 Japanese yen from 110.84 yen late Friday. The euro fell to 1.1147 dollars from 1.1195 dollars, and the British pound slipped to 1.2729 dollars from 1.2780 dollars.