By Anna Hirtenstein and Amber Burton 

The Dow Jones Industrial Average climbed Monday to record levels, while a selloff in U.S. government bonds extended into its sixth week and sapped demand for technology stocks.

The blue-chip index surged 586 points, or 1.9%, to 32083, on course to close above 32000 for the first time, following progress on a new fiscal stimulus bill that brightened economic prospects. The S&P 500 climbed 0.9%.

Meanwhile, the Nasdaq Composite fell 0.4% as tech stocks extended their declines. Rising bond yields dent the allure of growth stocks like those of big tech companies. Apple shares dropped 2.6%, extending their declines for the year to 11%. Netflix and Facebook declined more than 1%.

In the bond market, the yield on benchmark 10-year U.S. Treasurys ticked up to 1.602% as investors sold bonds. The yield ended Friday at 1.551%, its highest since February 2020. In addition, many investors are continuing to keep an eye on the pace in which rates go up.

"Even though we got somewhat of a respite from the rising rate reaction, we do think that's really important to keep an eye on," said Lisa Erickson, the head of traditional investments at U.S. Bank Wealth Management. "Certainly the trajectory for rates is up as the economy reopens, so a lot of it just depends on the speed and the pace of how quickly rates go up."

President Biden's $1.9 trillion Covid-19 relief plan was approved in the Senate over the weekend and faces a vote in the House as early as Tuesday. The additional fiscal spending is expected to bolster the pace of economic recovery and boost inflation. As the outlook brightens, money managers are moving out of government bonds and technology stocks and into sectors such as banks and energy that are likely to rebound with the economy.

"Stimulus checks into people's bank accounts will be a big propeller of growth, given the consumer in the U.S. makes up such a big part of U.S. growth," said Shaniel Ramjee, a multiasset fund manager at Pictet Asset Management. "The underlying strength of the U.S. economy, growing expectations that the stimulus gets fully passed, plus inflation expectations rising because of oil: these are all likely to continue to push bond yields higher."

Tech stocks have been retreating in recent weeks as vaccination programs advance and economic data point to the recovery being under way. The Nasdaq Composite Index declined more than 2% last week, losing ground for a third consecutive week. That is because investors are betting that the largest media, communications and online-shopping companies will see a slower pace of growth as pandemic lockdowns end.

Tech stocks were the only declining sector in the S&P 500 Monday. Shares of Tesla, the electric-vehicle maker that is a favorite among individual investors, slid 2.5%. It has lost more than 15% so far in 2021.

"The main market element is what's happening in the yield market: The U.S. tech side is suffering from the current normalization in the cost of capital," said Samy Chaar, chief economist at Lombard Odier. "The market is currently acknowledging that we're in a recovery. Flows are rebalancing to better reflect this cyclical recovery."

Among other stocks, General Electric rose 2.7%. The Wall Street Journal reported that the industrial conglomerate was nearing a $30 billion deal to combine its aircraft-leasing business with Ireland's AerCap.

Investment firm Athene Holding rose over 7% after it said it would combine in an all-stock deal with Apollo Global Management.

Overseas, the pan-continental Stoxx Europe 600 rose 2.1%, led by banking stocks.

In Asia, most major benchmarks fell. The Shanghai Composite dropped 2.3% and Hong Kong's Hang Seng Index declined 1.9% as investors grappled with signs that Chinese policy makers will take more action to rein in debt and prevent asset bubbles from forming.

Write to Anna Hirtenstein at and Amber Burton at


(END) Dow Jones Newswires

March 08, 2021 12:59 ET (17:59 GMT)

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