NEW YORK, N.Y. – The Dow Jones industrial average held at a record high on Wall Street Monday.
The market edged higher from Friday, when it got a lift from an unexpectedly strong U.S. jobs report for October. The surge in hiring made investors more optimistic that the U.S. economy is getting stronger.
Stock trading was muted as bond markets were closed for Veterans Day. Traders on the floor of the New York Stock Exchange held a moment of silence in observance of the holiday.
The Dow has advanced for five straight weeks and is up 20 per cent so far this year. The last time the Dow had a bigger advance for a whole year was 2003, when it rose 25 per cent.
Other major indexes have also surged. Stocks have been propelled higher this year by economic stimulus from the Federal Reserve, a gradually improving economy and rising company earnings.
Given that the market is “up hugely” this year, investors may be hesitant to put more money into stocks, said Andres Garcia-Amaya, a global market strategist at JPMorgan Funds. “At the same time, I don’t think people are going to leave at this point,” he said.
The Dow rose 19 points, or 0.1 per cent, to 15,781 as of 3:05 p.m. The Standard & Poor’s 500 index was flat at 1,771. The Nasdaq composite rose three points, or less than 0.1 per cent, to 3,922.
Investors this week will look for evidence that Americans are ready to start spending for the holidays. Macy’s, Wal-Mart, Nordstrom and Kohl’s are scheduled to report their quarterly results.
About ninety per cent of the companies in the S&P 500 have released their third-quarter earnings, and the majority beat the expectations of Wall Street analysts, according to data from S&P Capital IQ.
Earnings are forecast to grow by 5.6 per cent in the July-to-September period, compared with 4.9 per cent in the second quarter and 2.4 per cent in the same period a year earlier.
Investors will be closely following the Senate Banking Committee’s confirmation hearing for Janet Yellen on Thursday. Yellen has been nominated to succeed Federal Reserve Chairman Ben Bernanke, becoming the first woman to lead the U.S. central bank.
Yellen’s testimony “is coming at an important inflection point,” for financial markets, as the Fed considers pulling back on its stimulus, said Quincy Krosby, market strategist at Prudential Financial. The Fed is currently buying $85 billion of bonds every month and holding its benchmark interest rate close to zero to stimulate economic growth.
“The market will be looking for any clues” about the Fed’s policy going forward, Krosby said.
The yield on the 10-year Treasury note jumped last week to 2.75 per cent, the highest in six weeks, after the government reported last month’s surge in hiring.
In commodities trading, the price of oil rose 54 cents, or 0.6 per cent, to $95.14 a barrel. The price of gold fell $3.50, or 0.3 per cent, to $1,281.10 an ounce.
Among stocks making big moves:
— ViroPharma jumped $10, or 26 per cent, to $49.42, after the company agreed to be acquired by drugmaker Shire PLC.
— Transocean rose $1.80, or 3.4 per cent, to $55.27 after the company said it had agreed to a deal with billionaire investor and minority shareholder Carl Icahn after a months-long proxy fight. The company will pay a $3-a-share dividend and reduce the size of its board.
— Best Buy rose $1.38, or 3.3 per cent, to $43.80 after an analyst at UBS lifted his rating on the stock to buy from neutral and raised his price target on the stock, in anticipation of better earnings from the retailer. Best Buy has risen 270 per cent this year, making it the best performer in the S&P 500 index.