By Dan Strumpf
Stocks extended their record-setting rally into Monday, as
investors continued to digest upbeat economic data and improving
corporate profits.
The Dow Jones Industrial Average recently rose 46 points, or
0.3%, to 17620, marking its fifth-straight session of gains.
Earlier in the day, the blue-chip index notched a fresh intraday
record of 17621.19. The S&P 500 also notched an intraday high
and recently advanced six points, or 0.3%, to 2038, in its fourth
day of gains.
The Nasdaq Composite Index added 17 points, or 0.4%, to
4650.
Traders reported a quiet session with restrained buying
following Friday's jobs report, which showed that U.S. employers
added jobs at a moderate pace for another month in October. The
report lifted the Dow Industrials and the S&P 500 to record
closes. For the year, the Dow has notched 22 records and the
S&P has ended at 38 closing highs, gains that investors widely
attribute to the Federal Reserve's easy-money policies, a slow but
steadily improving economy and improving corporate earnings.
Brian Fenske, head of sales trading at brokerage ITG, said that
while "companies are by no means knocking the cover off the ball"
in their recent quarterly earnings reports, "the mood is that
things are OK....people still like stocks broadly as an asset
class."
With the third-quarter earnings season winding down, investors
are widely expect to keep their attention in the coming months
fixed on the Federal Reserve for hints on when the central bank
might begin raising short-term interest rates. Many investors said
that October's jobs report did little to shift their perception
when the interest-rate increase will occur, expected some time next
year.
Jack McIntyre, senior research analyst at Brandywine Global,
which manages about $60 billion, said he expects risky assets like
stocks to continue to benefit even as the Fed raises rates, given
recent steps toward looser monetary policy by central banks in
Europe and Japan.
"Even with the Fed ending quantitative easing and nudging
interest rates higher next year, the financial markets are going to
have this tailwind of more-than-adequate monetary policy," he said.
"That should set a good backdrop for risk assets."
Crude-oil futures shed 1.6% to $77.40 a barrel, extending a
decline that has sent oil prices tumbling 28% from their recent
highs of late June. The decline has dented energy stocks and led
investors to reassess the implications of cheaper oil on corporate
outlooks.
Oil-sensitive stocks fell, with shares of Chevron down 0.9% and
Exxon Mobil easing 0.3%.
Chinese shares posted their biggest daily percentage gain since
July after Chinese regulators said Shanghai's stock market would
open up to overseas investors on Nov. 17, through the launch of a
trading link between Hong Kong and Shanghai.
The Stoxx Europe 600 rose 0.7%. Two million Catalans voted in
favor of independence from Spain on Sunday in a symbolic,
nonbinding exercise. In September, Scottish voters voted against
separating from the U.K.
In commodities markets, gold futures fell 0.9% to $1159.60 an
ounce.
No major economic-data reports were released Monday. Later in
the week, investors will get a reading on retail sales in October
and a preliminary gauge of consumer sentiment in November.
Katrina Lamb, head of investment strategy and research at MV
Financial, which manages about $500 million, said she is looking
ahead to the coming holiday sales season to help guide stocks
through the end of the year.
"You've got a good economic story here in the U.S.," Ms. Lamb
said. "In the absence of anything negative, you could look for
something positive in holiday sales."
Investors will also get a late batch of quarterly earnings
reports in the week ahead. Earnings updates of note this week
include retailers such as Macy's Inc. and Wal-Mart Stores Inc.
Companies in the S&P 500 are on track to post earnings growth
of 8% in the third quarter, according to FactSet.
In corporate news, home builder Toll Brothers Inc. said
preliminary revenue in the quarter ended Oct. 31 rose 29% to $1.35
billion, topping expectations. Shares rose 2.8%.
Shares of GoPro Inc. fell 4.3%. The maker of portable cameras
filed plans Monday for an offering of $800 million in shares after
raising $491 million in its initial public offering in June.
The yield on the benchmark 10-year Treasury note edged higher to
2.357%.
Write to Dan Strumpf at daniel.strumpf@wsj.com