With tech giants back in charge, stocks hit records again
AP Business Writer
NEW YORK – Apple and other big-name technology stocks got back to their winning ways Monday and helped drive U.S. indexes once again to record heights.
The Standard & Poor’s 500 index rose 20.31 points, or 0.8 percent, 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 percent, to 21,528.99, and the Nasdaq composite jumped 87.25, or 1.4 percent, 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 percent 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, or 2.9 percent, to $146.34 for its second-best day of the year so far. Google’s parent, Alphabet, rose $16.60, or 1.7 percent, to $975.22. Altogether, tech stocks in the S&P 500 rose 1.7 percent, the largest gain among the 11 sectors that make up the index.
It’s 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’s proven to be a good move for investors to buy. That’s 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.'”
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, or 6.5 percent, to $67.73 after it agreed to buy EUROIMMUN Medical Laboratory Diagnostics of Germany for $1.3 billion in cash.
On the other end was energy company EQT, which fell $5.26, or 9 percent, to $53.51 for the largest loss in the index. It agreed to buy Rice Energy for $6.7 billion 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, or 24.8 percent, to $24.57.
In overseas markets, European shares rose after French voters gave their new president a political majority in parliament. The vote “will lend him enough support to rapidly implement his pro-business reform program,” said Marion Amiot, senior economist at Oxford Economics. She raised her forecast for French economic growth for 2018 to 1.7 percent from 1.6 percent.
The French CAC 40 gained 0.9 percent, and Germany’s DAX rose 1.1 percent. The FTSE 100 in London rose 0.8 percent as the United Kingdom opened negotiations to withdraw from the European Union.
In Asia, Japan’s Nikkei 225 added 0.6 percent, the Hang Seng in Honk Kong climbed 1.2 percent and South Korea’s Kospi gained 0.4 percent.
Bond prices fell, which sent yields higher. The yield on the 10-year Treasury rose to 2.18 percent from 2.15 percent late Friday. The two-year yield climbed to 1.35 percent from 1.31 percent, and the 30-year yield ticked up to 2.79 from 2.77 percent.
The dollar rose to 111.54 Japanese yen from 110.84 yen late Friday. The euro fell to $1.1147 from $1.1195, and the British pound slipped to $1.2729 from $1.2780.
In the commodities markets, benchmark U.S. crude fell 54 cents to settle at $44.43 per barrel. Brent crude, the international standard, fell 46 cents to settle at $46.91 a barrel.
Natural gas sank 14 cents to $2.89 per 1,000 cubic feet, heating oil fell 2 cents to $1.41 per gallon and wholesale gasoline held relatively steady at $1.45 per gallon.
Gold fell $9.80 to settle at $1,246.70 per ounce, silver lost 16 cents to $16.50 per ounce and copper added 3 cents to $2.59 per pound.