Dow books 150-point gain as stock market overcomes ‘act of pure evil’ to end at records
U.S. stock benchmarks closed at all-time highs on Monday afternoon, as equities resumed a steady run-up that could set the tone for the final three months of 2017. Four main benchmarks set records: the S&P 500 index, the Dow, the Nasdaq and the small-cap Russell, shaking off a mass shooting in Las Vegas that President Donald Trump described as “an act of pure evil.”
What are the stock benchmarks doing?
The S&P 500 index SPX, +0.39% advanced by 9.76 points, or 0.4%, finishing at a record 2,529.12, powered by gains in the health-care and financials sectors, up 1% and 0.9%, respectively. The Dow Jones Industrial Average DJIA, +0.68% added 152.51 points, or 0.7%, to a fresh all-time peak at 22,557.60, supported by gains in3M Co. MMM, +1.36% and Goldman Sachs Group Inc. GS, +1.46%
The Nasdaq Composite Index COMP, +0.32% meanwhile, tacked on 20.76 points, or 0.3%, to 6,516.72. The Russell 2000 Index RUT, +1.25% also carved out a record, up 1.3% at 1,509.47.
What are strategists and traders saying?
“l think what’s driving the market is just optimism about the fourth quarter, along with expectations that results from the third quarter will be similar to the second quarter,” said Robert Pavlik, chief market strategist at Boston Private Wealth. He also said hope that the Trump administration will rework tax policy is supporting buying appetite, although doubts linger about that coming to fruition this year.
“The continued talk [about taxes] that’s all that really matters, but I don’t think that anything gets voted on and passed this year,” he said.
Which stocks are in focus?
Shares in MGM Resorts International MGM, -5.58% dropped 5.6% in the wake of a mass shooting at the company’s Mandalay Bay property in Las Vegas. A gunman opened fire on a crowd at an outdoor country-music concert in Las Vegas on Sunday night, leaving at least 58 people dead and more than 500 injured.
Gun-maker shares were active in Monday trade. Smith & Wesson parent American Outdoor Brands Corp.’s AOBC, +3.21% stock jumped 3.2%, while Sturm, Ruger & Co. Inc. stocks RGR, +3.48% climbed 3.5%. Vista Outdoor Inc., sharesVSTO, +2.44% were 2.4% higher.
Streaming-media company Roku Inc.’s stock ROKU, -11.23% traded 11.2% lower. The new issue surged in its trading debut Thursday, then jumped again Friday.
Software giant Oracle Corp.’s stock ORCL, +0.93% gained after Chairman Larry Ellison guaranteed late Sunday to offer database warehousing at less than half the price charged by rival Amazon.com Inc. AMZN, -0.22% Shares of Oracle rose 0.9%, while Amazon shares ended down about 0.2%.
ESPN parent Walt Disney Co. DIS, +1.31% and cable operator Altice USA Inc.ATUS, +0.81% gained after they reached a tentative agreement late Sunday to keep Disney’s channels on the air for millions of subscribers in the New York area. Disney’s stock finished up 1.3%, and shares of Altice USA Inc. rose 0.8%.
What’s driving the market?
The closely watched ISM manufacturing index was at 60.8 in September, representing the highest level for the economic reading since 2004. A reading of 50 indicates expansion. A separate reading on manufacturing activity from IHS Markit came in at 53.1 for the same month, compared with 52.8 in the prior month. Economists polled by MarketWatch had expected a reading of 58.1% for ISM’s index, down from 58.8% in August.
Construction spending, meanwhile, increased 0.5% during the month, and stood 2.5% higher than a year ago. Outlays were at a seasonally adjusted annual $1.22 trillion rate in August, while July’s initial tally was raised to $1.212 trillion. The median forecast among economists surveyed by MarketWatch was for a 0.4% increase.
Minneapolis Fed President Neel Kashari on Monday urged Federal Reserve policy makers not to raise interest rates again until inflation hits the central bank’s 2% annual target, disagreeing with Fed Chairwoman Janet Yellen He isn’t a voting member of the Fed’s policy-setting committee.
Similarly, Dallas Fed President Rob Kaplan said the Fed should be “patient” with monetary policy and that the central bank should wait to see a rise in inflation to justify a rate hike, speaking at a moderated Q&A at the Fed’s El Paso, Texas, branch. Kaplan is a voting member of the Fed.
What other assets are doing
Spain’s IBEX stock benchmark IBEX, -1.21% closed 1.2% lower after voters in Catalonia backed secession in a Sunday referendum that was marred by violent clashes and boycotted by opponents. The euro EURUSD, -0.2301% lost ground, while the Stoxx Europe 600 SXXP, +0.51% rose.
Oil futures CLX7, -0.28% settled firmly in the red and gold futures GCZ7, -0.34% retreated to finish at a two-month low, as the ICE U.S. Dollar Index DXY, +0.25%gained. Asian stocks closed mostly higher, though several markets were shut for holidays.