Home » NEWS » Banking & Finance » Dow hits another record as bank stocks continue to climb

Dow hits another record as bank stocks continue to climb

U.S. stocks are rising Monday morning, led by gains in bank stocks, sending the Dow Jones industrial average to another record high. Other major indexes are also up but still below their own all-time highs.

European stocks were mostly higher, but Italy’s market fell after Italian voters rejected constitutional changes, dealing a major setback to Premier Matteo Renzi.

KEEPING SCORE: The Dow Jones industrial average rose 93 points, or 0.5 percent, to 19,263 as of 10 a.m. The Standard & Poor’s 500 index jumped 14 points, or 0.7 percent, to 2,206. The Nasdaq composite climbed 45 points, or 0.9 percent, to 5,300.

BIG GAINS FOR BANKS: Banks resumed their post-election rally and are trading at their highest levels since early 2008. Goldman Sachs gained $4.44, or 2 percent, to $227.80, a nine-year high. While stocks traded lower overall last week, banks are on a four-week winning streak since the election.

THE BOND EFFECT: Banks are benefiting from rising long-term interest rates in the bond market, which will make it more profitable for banks to lend money. Bond prices fell again early Monday, sending the yield on the 10-year Treasury note up to 2.45 percent from 2.39 percent late Friday. That’s the highest level since July 2015. That yield is used to set interest rates on many kinds of loans including home mortgages.

Stocks that pay big dividends, like utility companies and household products retailers, traded lower. Those stocks are often seen as similar to bonds, and investors are less attracted to them when bond yields rise. Utilities were the only industry group in the S&P 500 to decline early Monday.

ITALY SAYS NO: Italian voters rejected proposed constitutional changes to the national constitution on Sunday, causing political and economic uncertainty for Europe’s fourth-largest economy. Prime Minister Matteo Renzi said he would resign. Italy’s FTSE MIB index fell 0.9 percent.

ENERGY: Benchmark U.S. oil rose 46 cents to $52.14 per barrel in New York. Oil hasn’t closed above $52 a barrel since July 2015. Brent crude, used to price international oils, gained 60 cents, or 1.1 percent, to $55.06 a barrel in London.

Among energy stocks, ConocoPhillips picked up $1.25, or 2.6 percent, to $49.37 and Hess rose $2.12, or 3.7 percent, to $60.04.

DAKOTA DISPUTE: On Sunday the Army Corps of Engineers denied a permit for the Dakota Access oil pipeline in North Dakota. The Standing Rock Sioux tribe and its supporters argue that the proposed route for the pipeline threatens the tribe’s water source and cultural sites. It’s the last major piece of construction on the 1,200-mile, $3.8 billion pipeline. The companies involved in the pipeline criticized the decision and it’s not clear if the government’s position might change when the Trump administration takes power in January.

The companies connected to the pipeline traded lower Monday. Energy Transfer Equity gave up 38 cents, or 2.3 percent, to $16.10. Energy Transfer Partners lost $1.26, or 3.7 percent, to $33.12 and Sunoco Logistics shed 82 cents, or 3.6 percent, to $22.36. Those two companies recently agreed to combine.

CURRENCY: The dollar rose to 114.33 yen from 113.67 yen. The euro rose to $1.0731 from $1.0660.

OVERSEAS: Outside of Italy, European stock indexes were mostly higher. Germany’s DAX added 1.2 percent and France’s CAC-40 gained 0.7 percent. In London the FTSE 100 advanced 0.2 percent. Asian stocks mostly fell. Tokyo’s Nikkei 225 retreated 0.8 percent. The South Korean Kospi gave up 0.4 percent and the Hang Seng in Hong Kong lost 0.3 percent.

BEFORE YOU GO…

… we’d like to ask for your support. More people are reading the Mississippi Business Journal than ever before, but advertising revenues for all conventional media are falling fast. Unlike many, we do not use a pay wall, because we want to continue providing Mississippi’s most comprehensive business news each and every day. But that takes time, money and hard work. We do it because it is important to us … and equally important to you, if you value the flow of trustworthy news and information which have always kept America strong and free for more than 200 years.

If those who read our content will help fund it, we can continue to bring you the very best in news and information. Please consider joining us as a valued member, or if you prefer, make a one-time contribution.

Click for more info

About Associated Press

Leave a Reply

Your email address will not be published. Required fields are marked *

*