The TSX, Dow and S&P 500 all closed at record highs Monday, as an easing in government bond yields generated a friendly environment for taking on more exposure to equity markets.
Investors are awaiting cues from the Federal Reserve this week amid caution over rising borrowing costs spurred by massive fiscal stimulus. The yield on benchmark 10-year Treasuries ticked lower to 1.60%, below its 13-month peak of 1.64% on Friday, and yields on Government of Canada bonds also eased back modestly on Monday.
Shaw Communications Inc. Class B shares closed up 41.63% at $33.85 - well below a $40.50-per-share takeover offer made by Rogers Communications Inc. Monday morning, in a sign that investors are concerned that regulatory scrutiny could get in the way of the blockbuster deal. Rogers Class B shares closed up 3.39%, well off their highs of the day.
The telecom sector led gainers on the TSX, rallying 6.39%. Yet, two of the other biggest Canadian telecom stocks, BCE and Telus, closed lower for the day - despite initially trading higher in the opening moments of trade. BCE closed down 1.03% and Telus 1.47%.
Gains in the major indexes accelerated near the end of the trading session. The S&P/TSX Composite Index closed up 103.43 points, or 0.55%, at 18,954.75. It has now been up seven sessions in a row. The heavyweight financials sector Monday dipped 0.30%, and energy stocks declined 1.23% as the price of crude oil came under modest pressure.
In a concrete sign that the worst of the damage from the coronavirus pandemic may be over for the airline industry, Delta Air Lines, Southwest Airlines and JetBlue Airways said leisure bookings were rising.
The S&P 1500 airlines index jumped over 4% to a one-year high, while other travel-related stocks, including Carnival Corp, Wynn Resorts and MGM Resorts jumped between 2% and 5%. Air Canada, despite initially rallying, only closed up 0.27%.
Nine of the 11 major S&P sector indexes rose, led by utilities and real estate, each up more than 1%.
It was the Dow’s sixth straight record high close in a recent surge fueled by mass vaccinations and congressional approval of a $1.9 trillion aid bill. Expectations of a recovery accelerated demand for stocks expected to outperform as the economy reopens, such as banks, energy, materials companies.
On Monday, the Russell growth index outperformed the Russell value index in a modest reversal of investors’ recent trend away from technology and other high-growth stocks.
“With the vaccine positive news and the stimulus, we think there will continue to be a fair amount of rotation out of the stay-at-home stocks,” said Greg Bassuk, CEO of AXS Investments. “We are bullish on financial services and energy coming out of the pandemic.”
The S&P 500 has gained almost 6% in 2021, while the Dow has added nearly 8%.
At the end of Fed’s two-day meeting on Wednesday, policymakers are expected to forecast that the U.S. economy will grow in 2021 at its fastest rate in decades while reiterating their dovish stance for the foreseeable future.
The Dow Jones Industrial Average rose 0.53% to end at 32,953.46 points, while the S&P 500 gained 0.65% to 3,968.94.
The Nasdaq Composite climbed 1.05% to 13,459.71. It remains down almost 5% from its Feb. 12 record high close.
Volume on U.S. exchanges was 12.5 billion shares, compared with the 14.5 billion average for the full session over the last 20 trading days.
Advancing issues outnumbered declining ones on the NYSE by a 1.78-to-1 ratio; on Nasdaq, a 1.35-to-1 ratio favored advancers.
The S&P 500 posted 90 new 52-week highs and no new lows; the Nasdaq Composite recorded 281 new highs and 15 new lows.
MSCI’s gauge of stocks across the globe gained 0.37%.
Oil prices slipped, pulling back from earlier gains bolstered by strong Chinese economic news, because of concerns about potential U.S. tax increases to pay for infrastructure spending.
U.S. West Texas Intermediate crude for April settled at $65.39 a barrel, down 22 cents. Brent crude futures for May settled at $68.88 a barrel, losing 34 cents.
Read more: Stocks that saw action Monday - and why
With files from Reuters
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