U.S. Stocks Move Mostly Higher, Dow Extends Winning Streak

After ending last Friday’s trading narrowly mixed, stocks moved mostly higher during trading on Monday. The major averages all moved to the upside, with the Dow once again reaching its best closing level in well over a year.

The major averages gave back some ground going into the close but remained in positive territory. The Dow climbed 183.55 points or 0.5 percent to 35,411.24, the Nasdaq edged up 26.06 points or 0.2 percent to 14,058.87 and the S&P 500 rose 18.30 points or 0.4 percent to 4,554.64.

The markets continued to benefit from recent upward momentum, which has contributed to an eleven-day winning streak for the Dow, the longest since February 2017.

The recent strength lifted all three major averages to their best levels in over a year last week, although the Nasdaq and S&P 500 have pulled back off their highs.

Overall trading activity remained somewhat subdued, however, as traders looked ahead to the Federal Reserve’s monetary policy decision on Wednesday.

With the Fed widely expected to raise interest rates by another 25 basis point, traders are likely to pay close attention to the accompanying statement for clues about the outlook for rates.

Recent encouraging inflation data has led to optimism this week’s rate hike will be the last, and traders will be looking for confirmation from the Fed.

“U.S. stocks are catching a modest bid here as optimism grows that the Fed won’t remain hawkish and will likely signal they will deliver one more hike and potentially pause for a long time,” said Edward Moya, senior market analyst at OANDA.

He added, “The Dow Jones Industrial Average still remains the go-to trade on Wall Street as energy and financials continue to rise.”

A lack of major U.S. economic data may have kept some traders on the sidelines ahead of the release of several key reports in the coming days.

Sector News

Steel stocks moved sharply higher over the course of the session, driving the NYSE Arca Steel Index up by 2.5 percent to its best closing level in over four months.

Considerable strength was also visible among energy stocks, which moved notably higher along with the price of crude oil.

With crude for September delivery surging $1.67 to $78.74 a barrel, the Philadelphia Oil Service Index and the shot up by 2.3 percent and 1.8 percent, respectively.

Banking stocks also showed a significant move to the upside, resulting in a 1.7 percent jump by the KBW Bank Index. With the gain, the index reached a four-month closing high.

Telecom and commercial real estate stocks also saw some strength on the day, while biotechnology and airline stocks have moved notably lower.

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 jumped by 1.2 percent, while Hong Kong’s Hang Seng Index plunged by 2.1 percent.

The major European markets also finished the day mixed. While the French CAC 40 Index edged down by 0.1 percent, the German DAX Index inched up by 0.1 percent and the U.K.’s FTSE 100 Index rose by 0.2 percent.

In the bond market, treasuries moved modestly lower over the course of the session after seeing early strength. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 2.0 basis points to 3.857 percent after hitting a low of 3.798 percent.

Looking Ahead

Trading on Tuesday may be driven by reaction to the latest earnings news, with 3M (MMM), General Electric (GE), General Motors (GM) and Verizon (VZ) among the companies due to report their quarterly results before the start of trading.

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