After showing a strong move to the upside early in the session, stocks gave back some ground over the course of the trading day on Monday but managed to close mostly higher. While the major averages pulled back off their best levels of the day, the Dow still reached a new record closing high.

The Dow closed higher for the fourth consecutive session, jumping 440.06 points or 1.0 percent to 44,736.57. The S&P 500 (SPI:SP500) extended its winning streak to six sessions, climbing 18.03 points or 0.3 percent to 5,987.37, while the Nasdaq rose 51.18 points or 0.3 percent to 19,054.84.

Stocks added to the strong gains posted last week amid a positive reaction to news President-elect Donald Trump intends to nominate billionaire hedge fund manager Scott Bessent as Treasury Secretary.

Bessent is seen as supportive of the equity markets and an advocate for deficit reduction. He has also called for Trump’s planned tariff increases to be implemented gradually, which could reduce the impact on inflation.

“Hedge fund manager Scott Bessent is perceived as being a relatively conventional and safe pair of hands candidate,” said AJ Bell investment director Russ Mould. “Importantly, Bessent is seen as being less aggressive on tariffs than some of the rhetoric espoused by Trump on the campaign trail.”

He added, “A fall in bond yields in response to his unveiling suggests some of the concern about a new wave of inflationary pressures from import tariffs has eased and that Bessent might be able to do something to bring the U.S. deficit under control.”

However, buying interest waned as the day progressed, as traders seemed reluctant to make more significant moves ahead of the release of several key economic reports in the coming days.

A report on personal income and spending the month of October is likely to be in the spotlight, as it includes the Federal Reserve’s preferred inflation readings.

Reports on consumer confidence, new home sales and durable goods orders are also likely to attract attention along with the minutes of the Fed’s latest monetary policy meeting.

Sector News

Housing stocks moved sharply higher amid a steep drop by treasury yields, resulting in a 4.5 percent spike by the Philadelphia Housing Sector Index.

Substantial strength was also visible among computer hardware stocks, with the NYSE Arca Computer Hardware Index soaring by 4.1 percent to a four-month closing high.

Airline stocks also showed a significant move to the upside on the day, driving the NYSE Arca Airline Index up by 2.6 percent.

Commercial real estate, retail and biotechnology stocks also saw considerable strength, while gold stocks plunged along with the price of the precious metal.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan’s Nikkei 225 Index jumped by 1.3 percent, while China’s Shanghai Composite Index edged down by 0.1 percent and Hong Kong’s Hang Seng Index fell by 0.4 percent.

Meanwhile, the major European markets all moved to the upside on the day. While the French CAC 40 Index closed just above the unchanged line, the U.K.’s FTSE 100 Index and the German DAX Index both rose by 0.4 percent.

In the bond market, treasuries moved sharply higher in reaction to Trump’s Treasury Secretary pick. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, plunged 14.5 basis points to 4.265 percent.

Looking Ahead

Trading on Tuesday may be impacted by reaction to reports on new home sales and consumer confidence as well as the minutes of the latest Fed meeting.

SOURCE: RTTNEWS