U.S. Stocks Move Mostly Higher, Dow And S&P 500 Set New Record Closing Highs

Stocks turned in a lackluster performance for much of the trading session on Monday but managed to end the day mostly higher. With the upward move on the day, the Dow and the S&P 500 reached new record closing highs.

The major averages showed a strong move to the upside going into the close, ending the session near their best levels of the day. The Dow rose 174.82 points or 0.5 percent to 32,953.46, the Nasdaq jumped 139.84 points or 1.1 percent to 13,459.71 and the S&P 500 climbed 25.60 points or 0.7 percent to 3,968.94.

The strength that emerged on Wall Street reflected optimism about the economic outlook amid stepped up coronavirus vaccination efforts and the recent passage of a new $1.9 trillion stimulus bill.

A pullback by treasury yields may also have generated some buying interest, with the ten-year yield moving lower after ending last Friday’s trading at its highest closing level in over a year.

Trading activity was somewhat subdued, however, as traders looked ahead to the Federal Reserve’s monetary policy announcement on Wednesday.

The Fed is widely expected to leave interest rates unchanged, but traders will be paying close attention to any changes to the accompanying statement.

Some traders are hoping the Fed will address the recent spike in bond yields, which has led to considerable volatility in Wall Street in recent sessions.

On the U.S. economic front, a report released by the Federal Reserve Bank of New York showed an acceleration in the pace of growth in New York manufacturing activity in the month of March.

The New York Fed said its general business conditions index climbed to 17.4 in March from 12.1 in February, with a positive reading indicating growth in regional manufacturing activity. Economists had expected the index to rise to 14.5

Looking ahead, the New York Fed said firms remained optimistic that conditions would improve over the next six months, anticipating significant increases in employment.

Sector News

Airline stocks showed a substantial move to the upside on the day, with the NYSE Arca Airline Index soaring by 3.8 percent to its best closing level in nearly three years.

Significant strength was also visible among gold stocks, as reflected by the 2.1 percent jump by the NYSE Arca Gold Bugs Index. The rally by gold stocks came as the price of gold for April delivery climbed $9.40 to $1,729.20 an ounce.

Semiconductor stocks also turned in a strong performance, resulting in a 2.3 percent advance by the Philadelphia Semiconductor Index.

Biotechnology, housing and networking stocks also saw considerable strength on the day, while steel and banking stocks moved to the downside.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index edged up by 0.2 percent, while China’s Shanghai Composite Index slumped by 1 percent.

Meanwhile, the major European markets moved to the downside on the day. While the German DAX Index fell by 0.3 percent, the French CAC 40 Index and the U.K.’s FTSE 100 Index both dipped by 0.2 percent.

In the bond market, treasuries regained ground after moving sharply lower last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, dropped 2.8 basis points to 1.607 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on retail sales, industrial production and homebuilder confidence.

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