The S&P 500 and Dow Jones Industrial Average closed at record highs on Monday, as investors eyed an economic recovery from the coronavirus pandemic and awaited cues from the United States Federal Reserve this week amid caution over rising borrowing costs.
The Dow Jones Industrial Average rose 0.53 percent to end at 32,953.46 points on Monday in New York.
The broader S&P 500 index – a proxy for the health of retirement and college savings accounts – gained 0.65 percent to land at 3,968.94 and the Nasdaq Composite Index vaulted 1.05 percent to close at 13,459.71. However, the Nasdaq remains down almost 5 percent from its February 12 record high close.
And in a concrete sign that the worst of the damage from the pandemic may be over for the airline industry, Delta Air Lines, Southwest Airlines and JetBlue Airways said leisure bookings were rising.
Gains in the major indexes accelerated near the end of the trading session.
The S&P 1500 Airlines Index jumped over 4 percent to a one-year high, while other travel-related stocks – including Carnival Corp, Wynn Resorts and MGM Resorts – jumped between 2 percent and 5 percent.
Nine of the 11 major S&P sector indexes rose, led by utilities and real estate, each up more than 1 percent.
It was the Dow’s sixth straight record high close in a recent surge fuelled by mass vaccinations and US congressional approval of a $1.9 trillion aid bill. Expectations of a recovery accelerated demand for stocks expected to outperform as the economy reopens, such as banks, energy, and materials companies.
On Monday, the Russell Growth Index outperformed the Russell Value Index in a modest reversal of investors’ recent trend away from technology and other high-growth stocks.
“With the vaccine positive news and the stimulus, we think there will continue to be a fair amount of rotation out of the stay-at-home stocks,” said Greg Bassuk, CEO of AXS Investments. “We are bullish on financial services and energy coming out of the pandemic.”
The S&P 500 has gained almost 6 percent in 2021, while the Dow has added nearly 8 percent.
At the end of the Fed’s two-day meeting on Wednesday, policymakers are expected to forecast that the US economy will grow in 2021 at its fastest rate in decades while reiterating their dovish stance for the foreseeable future.
Tesla rose about 2 percent after the company dubbed Chief Executive Elon Musk “Technoking of Tesla” in a formal regulatory filing.
Eli Lilly and Co shares slumped 9.1 percent after a mid-stage trial testing the company’s experimental Alzheimer’s disease drug led to “mixed” results, reducing the chances for the drug’s accelerated approval, according to analysts.
The S&P 500 posted 90 new 52-week highs and no new lows; the Nasdaq Composite Index recorded 281 new highs and 15 new lows.