S&P hits record high as US economic outlook brightens
The S&P 500 hit a record intraday high on Monday as investors were more optimistic about the U.S. economy amid lingering concerns about global growth.
The benchmark index, which struggled to break past its May 2015 high in the past few months, got a solid boost on Friday after a robust monthly jobs report.
The S&P 500 touched a record intraday high of 2,140.43 points, topping its previous all-time high of 2,134.72. At 11:13 a.m. ET, the index was up 10.53 points, or 0.49pc.
The gains were broad-based, with seven of the 10 major S&P sectors higher. Industrials and consumer staples also hit record highs.
Utilities and telecom service stocks, considered defensive sectors, fell about 0.4pc.
The two indexes have risen 20pc this year, outperforming other S&P indexes.
It has become very clear that interest rate hikes are going to be delayed and that provides an opportunity for investors looking for yields that they can't get from bonds, said Ernesto Ramos, head of equities at BMO Global Asset Management.
Yields on 10-yearUS Treasury notes rose on Monday, but remained close to the record low hit in the aftermath of Britain's vote to leave the European Union.
The Dow Jones Industrial Average was up 114.3 points, or 0.63pc, at a more than 13-month high of 18,261.04, while the Nasdaq Composite index was up 38.15 points, or 0.77pc, at 4,994.90.
Much of how the indexes perform over the next few weeks will depend of the quality of second-quarter corporate earnings, which kick off with Alcoa reporting results after markets close on Monday.
"At some point you need earnings growth and if it turns out we don't have that earnings growth in the second half, then I do think the market can stall out here," said Dan Miller, director of equities at GW&K Investment Management in Boston.
The S&P 500 is trading near 16.7 times forward 12-month earnings, above the 10-year median of 14.7 times, according to StarMine data.
"I think the market has reached a valuation point which is extreme," said James Abate, chief investment officer at Centre Asset Management in New York.
Earnings of S&P 500 components are expected to fall 4.8pc, compared with the year-earlier quarter, according to Thomson Reuters data. First-quarter earnings had fallen 5pc.
Investors will also watch out for comments from company executives, especially those of big banks later this week, on the impact of Britain's vote to leave the European Union.
Shares of Apple rose 0.7pc to $97.36 and provided the biggest boost to the S&P.
Twitter fell 2.7pc to $17.60 after SunTrust Robinson lowered its rating to "neutral" from "buy".
Advancing issues outnumbered decliners on the NYSE by 2,208 to 666. On the Nasdaq, 1,961 issues rose and 733.
The S&P 500 index showed 67 new 52-week highs and no new lows, while the Nasdaq recorded 132 new highs and six new lows.