Stocks near records as banks and energy companies jump
Stocks are rising Monday as banks continue to climb along with bond yields and interest rates, and energy companies rally again with oil prices.
Better-than-expected auto sales and a strong report on U.S. factories are also helping stocks higher, although technology companies continue to struggle. U.S. markets will close early Monday for the Independence Day holiday.
KEEPING SCORE: The Standard & Poor's 500 index jumped 13 points, or 0.5 percent, to 2,436 as of 11:35 a.m. Eastern time. The Dow Jones industrial average rose 197 points, or 0.9 percent, to 21,546. The Russell 2000 index of smaller-company stocks added 11 points, or 0.8 percent, to 1,426. The Dow and Russell are both on track to surpass the record highs they set last month.
The Nasdaq composite lost 8 points, or 0.1 percent, to 6,131 as technology companies traded lower. Those companies have struggled for almost a month after a large surge earlier in the year.
TAKE IT TO THE BANK: Banks continued their recent winning ways as bond yields and interest rates increased further. Higher interest rates let banks make more money from lending, and that helped financial companies rally last week. Major banks also raised their dividends and said they will buy back more stock. JPMorgan Chase added $2.52, or 2.8 percent, to $93.42 and Citigroup rose $1.87, or 2.8 percent, to $68.75. Morgan Stanley climbed $1.31, or 3 percent, to $45.88.
Bond prices fell. The yield on the 10-year Treasury note rose to 2.35 percent from 2.30 percent. Companies that pay large dividends, like household goods makers and utility and phone companies, lagged the rest of the market.
MANUFACTURING: The Institute for Supply Management said U.S. factories did more work in June, and its survey of manufacturing reached its highest level in almost three years. That's an indicator of U.S. economic strength, and companies that stand to benefit from faster economic growth, like industrial and basic materials companies and banks, did well Monday. General Electric rose 46 cents, or 1.7 percent, to $27.48 and Boeing gained $1.63 to $199.38. Chemicals maker DuPont added $1.60, or 2 percent, to $82.31.
HIGH RATING: Consumer financial services company Bankrate climbed $1.08, or 8.4 percent, to $13.93 percent after it agreed to be acquired by Red Ventures for $14 a share, or $1.25 billion.
GET YOUR MOTOR RUNNING: Car companies are reporting their June U.S. sales Monday, and while overall sales are expected to decline for the sixth month in a row, early results were better than investors had anticipated. Ford and GM said their sales each fell about 5 percent, but Ford gained 45 cents, or 4 percent, to $11.64 and GM rose $1.02, or 2.9 percent, to $35.95. Fiat Chrysler advanced 46 cents, or 4.3 percent, to $11.09. Auto parts companies mostly rose as well.
ENERGY: Benchmark U.S. crude gained 81 cents, or 1.8 percent, to $46.85 a barrel in New York, on track for its eighth gain in as many days. Brent crude, used to price international oils, rose 72 cents, or 1.5 percent, to $49.49 a barrel in London. Before their recent winning streak, crude prices had reached their lowest levels of the year. Exxon Mobil rose $1.44, or 1.8 percent, to $82.17 and ConocoPhillips added $1.45, or 3.3 percent, to $45.41.
CHANGE OF PLANS?: Activist investment firm Jana Partners disclosed a 5.8 percent stake in EQT and said it opposes the energy company's plan to buy Rice Energy. The firm said it wants EQT to split off its exploration and production business instead. EQT agreed to buy Rice Energy for $6.7 billion in cash and stock last month. The deal would make EQT the largest U.S. producer of natural gas. EQT shares added $1.75, or 3 percent, to $60.34 while Rice Energy tumbled 95 cents, or 3.6 percent, to $25.68.
NOT GLITTERING: Precious metals prices dropped. Gold fell $21, or 1.7 percent, to $1,221.70 an ounce while silver lost 53 cents, or 3.2 percent, to $16.10 an ounce. Gold and copper miner Newmont Mining fell 73 cents, or 2.3 percent, to $31.66.
CURRENCY: The dollar jumped to 113.40 yen from 112.54 yen on Friday. The euro fell to $1.1358 from $1.1422.
OVERSEAS: France's CAC-40 gained 1.5 percent and the German DAX added 1.2 percent. London's FTSE 100 advanced 1 percent. In Tokyo, the Nikkei 225 added 0.1 percent. Hong Kong's Hang Seng was unchanged and the Kospi in South Korea added 0.1 percent.