NEW YORK, N.Y. – 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 per cent, to 19,263 as of 10 a.m. The Standard & Poor’s 500 index jumped 14 points, or 0.7 per cent, to 2,206. The Nasdaq composite climbed 45 points, or 0.9 per cent, 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 per cent, 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 per cent from 2.39 per cent 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 per cent.
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 per cent, to $55.06 a barrel in London.
Among energy stocks, ConocoPhillips picked up $1.25, or 2.6 per cent, to $49.37 and Hess rose $2.12, or 3.7 per cent, 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 per cent, to $16.10. Energy Transfer Partners lost $1.26, or 3.7 per cent, to $33.12 and Sunoco Logistics shed 82 cents, or 3.6 per cent, 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 per cent and France’s CAC-40 gained 0.7 per cent. In London the FTSE 100 advanced 0.2 per cent. Asian stocks mostly fell. Tokyo’s Nikkei 225 retreated 0.8 per cent. The South Korean Kospi gave up 0.4 per cent and the Hang Seng in Hong Kong lost 0.3 per cent.
AP Markets Writer Marley Jay can be reached at http://twitter.com/MarleyJayAP His work can be found at http://bigstory.ap.org/journalist/marley-jay