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Resurgent tech stocks lift US indexes to records

By: STAN CHOE, AP
June 19, 2017 Updated: June 19, 2017 at 10:36 am
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This July 16, 2013, file photo, shows a Wall Street street sign outside the New York Stock Exchange. U.S. stocks are climbing for the sixth day in a row Thursday, May 25, 2017, as strong quarterly results from retailers including Best Buy, Williams-Sonoma and PVH give consumer-focused companies a lift. The Standard & Poor’s 500 index and Nasdaq composite are trading at all-time highs. Stocks are stretching for their longest winning streak in three months. (AP Photo/Mark Lennihan, File).

NEW YORK — U.S. stock indexes climbed again to record heights on Monday, led by technology companies. They followed the lead of European markets, which jumped after French election results raised expectations for more pro-business economic reforms.

KEEPING SCORE: The Standard & Poor's 500 index rose 17 points, or 0.7 percent, to 2,450, as of noon Eastern time. If it holds there, it will surpass its record closing level of 2,440.35, set last Tuesday.

The Dow Jones industrial average added 113 points, or 0.5 percent, to 21,498, and the Nasdaq composite jumped 70, or 1.1 percent, to 6,222.

TECH REBOUND: Technology stocks in the S&P 500 rose 1.3 percent, the largest gain among the 11 sectors that make up the index. That helped them to recover some of their sharp losses from the last week.

Apple and other industry heavyweights had been among the stock market's biggest stars, and tech stocks in the S&P 500 were up more than 20 percent for the year until they took a sharp step down two Fridays ago. The worry seems to be that they rose too far, too quickly. Tech stocks lost about a fifth of their year-to-date gains in a little over a week.

On Monday, Apple rose $3.57, or 2.5 percent, to $145.84, and Google's parent, Alphabet, rose $14.64, or 1.5 percent, to $973.41.

BUY THE DIP, AGAIN: Every time the stock market has shown the slightest bit of weakness in the last eight years, it's been a good move for investors to buy. That's because stocks have erased whatever losses they've incurred, only to drive higher every time.

That track record has trained investors to pounce whenever they see a dip in the market, 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 like even less attractive investments. Plus, profit growth is improving for companies, which helps to justify the big gains in their stock prices.

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. 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.

The FTSE 100 in London rose 0.8 percent as the United Kingdom opened negotiations to withdraw from the European Union.

BUYOUT BOOST: PerkinElmer, which sells testing equipment and scientific instruments, jumped $3.14, or 4.9 percent, to $66.71 for one of the largest gains in the S&P 500 after it agreed to buy EUROIMMUN Medical Laboratory Diagnostics of Germany for $1.3 billion in cash.

A DIFFERENT BUYOUT REACTION: Energy company EQT fell $4.36, or 7.4 percent, to $54.41 for the largest loss in the S&P 500 after it agreed to buy Rice Energy for $6.7 billion in cash and stock. EQT said the deal will make it the country's largest producer of natural gas.

Rice jumped $5.30, or 26.9 percent, to $24.99.

YIELDS: Bond prices fell, which sent yields higher. The yield on the 10-year Treasury rose to 2.17 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 2.78 from 2.77 percent.

CURRENCIES: The dollar rose to 111.34 Japanese yen from 110.84 yen late Friday. The euro fell to $1.1158 from $1.1195, and the British pound slipped to $1.2741 from $1.2780.

COMMODITIES: Benchmark U.S. crude fell 20 cents, to $44.77 per barrel. Brent crude, the international standard, lost 15 cents to $47.22.

Natural gas sank 14 cents, or 4.5 percent, to $2.89 per 1,000 cubic feet.

Gold fell $6.90 to $1,249.60 per ounce, silver lost 13 cents to $16.54 per ounce and copper added 2 cents to $2.59 per pound.

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