U.S. stocks close higher as major indexes rise in unison
The U.S. stock market closed higher Monday, with the Dow leading the gains as investors continued to focus on corporate earnings and prospects for tax cuts.
Where did benchmarks finish?
The S&P 500 SPX, +0.13% gained 3.29 points, or 0.1%, to 2,582.14, with telecoms and financials topping the gains.
The Dow Jones Industrial Average DJIA, +0.31% rose 72.09 points, or 0.3%, to 23,430.33, and the Nasdaq Composite COMP, +0.12% advanced 7.92 points, or 0.1%, to 6,790.71.
What are strategists saying?
“The consensus trade on Wall Street has been buying European equities versus U.S. equities, but that’s on the condition that Europe is politically stable. When Merkel could not get her coalition, there was a short-lived flight to quality,” said Diane Jaffee, senior portfolio manager at TCW.
Jaffee noted that with bond yields so low, or negative in some cases, equities are still attractive for many investors.
“Earnings growth, especially revenue growth, continues to support U.S. equities,” Jaffee said.
“Market sentiment has grown less positive in recent weeks, with investors more concerned about tax policy, fuller valuations and a sense of complacency. From a fundamental perspective, investors are also becoming worried about the flattening yield curve and high yield market weakness, which tend to be bearish signals for equities,” said Robert Doll, chief equity strategist at Nuveen Asset Management LLC, in his weekly outlook. “But we think the two most important drivers of equity markets — corporate earnings and real growth levels — still support a risk-on investment stance.”
Which stocks were key movers?
Shares in Cavium Inc. CAVM, -0.25% jumped 11% following news that Marvell Technology Group Ltd. MRVL, +0.74% has signed a deal to buy the fellow chip maker for about $6 billion. Marvell gained 6.4%.
Shares of Microsoft Corp. MSFT, +0.16% added 0.2%, outperformed other high-profile tech stocks such as Apple Inc. AAPL, +0.04% , Facebook Inc. FB, +0.02% and Alphabet Inc. GOOGL, -0.12% GOOG, -0.07% .
Alibaba Group Holding Ltd.‘s stock BABA, +1.55% rose 1.6% after the e-commerce giant said it would buy a 36% stake in Chinese big-box retailer Sun Art Retail Group Ltd. 6808, -4.07% for $2.9 billion.
Shares of Delphi Automotive PLC DLPH, +3.49% climbed 3.5% after analysts at Bank of America upgraded the stock to buy from neutral.
Cardinal Health Inc CAH, -4.36% shares dropped 4.4% after analysts at Morgan Stanley cut the stock to underweight from equal-weight.
What are data saying about the economy?
The leading economic index surged 1.2% in October and suggested no letup in a steadily growing U.S. economy with the end of the year fast approaching.
What are other assets doing?
The euro EURUSD, +0.0852% tumbled to $1.17 after German governmental coalition talks broke down on Sunday, keeping the country’s government in limbo and casting doubt over Chancellor Angela Merkel’s future as leader.
The Stoxx Europe 600 index SXXP, +0.67% was higher, while the German DAX 30 index DAX, +0.50% also gained. In Asian trading hours, the Nikkei NIK, +1.25% dropped after the euro’s slide pushed up the yen EURJPY, +0.09% considered a haven in times of economic and political uncertainty.
Oil futures CLZ7, -0.57% fell, while gold prices GCZ7, +0.27% settled lower, mostly due to a stronger dollar.
The ICE U.S. Dollar index DXY, -0.05% was up 0.5%.