Investors grow more optimistic about the recovery in manufacturers.
NEW YORK — U. S. stocks set more records Monday as health care companies and banks continued to surge as investors grow more optimistic about the recovery in manufacturers.
Stocks got a boost after the Institute for Supply Management said U. S. factory activity hit a 13-year high in August as hurricanes disrupted supplies but drove up demand for manufactured goods. Investors snapped up shares of companies that are linked to more rapid economic growth, such as banks and health care and industrial companies as well as smaller, U. S.-focused companies. High-dividend stocks, which are traditionally considered safer and more cautious investments, lagged the rest of the market. Energy companies missed out on the gains as investors worried that oil supplies are rising.
In the last few weeks, stocks have returned to the pattern they followed from the November presidential election to President Trump’s inauguration in January: growth-oriented stocks have risen while the dollar has gotten stronger and bond yields have increased.
“We’ve seen this acceleration in global earnings growth over the last couple of months,” said Mark Hackett, chief of investment research at Nationwide Investment Management. “We’ve seen the rest of the world kind of pick up where the U. S. has been going.”
Hackett said that investors in the U. S. seem to have gotten more optimistic that a tax cut package and an infrastructure spending bill could pass a bitterly-divided Congress. That would strengthen the U. S. economy and corporate earnings.
The Standard & Poor’s 500 index rose 9.76 points, or 0.4 percent, to 2,529.12. The Dow Jones industrial average advanced 152.51 points, or 0.7 percent, to 22,557.60. The Nasdaq composite gained 20.76 points, or 0.3 percent, to 6,516.72. The Russell 2000 index of smaller-company stocks jumped 18.61 points, or 1.2 percent, to 1,509.47. All four indexes finished at record highs.
Leaders in health care included genetic testing equipment company Illumina, which gained $3.03, or 1.5 percent, to $202.23. Botox maker Allergan climbed $6.03, or 2.9 percent, to $210.98. Among industrials, General Electric jumped 39 cents, or 1.6 percent, to $24.57.
Oil prices dropped after oilfield services company Baker Hughes said last Friday that more drilling rigs went into operation last week after two weeks of declines, and Reuters reported that output of OPEC nations grew in September. Both of those reports suggest that oil supplies are rising.
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