Associated Press

Banks and other financial companies led U.S. stocks mostly higher Thursday, propelling the Dow Jones industrial average to a record high.

The Standard & Poor’s 500 index, a broader measure of the stock market, also eked out a gain, adding to a big rally the day before following Donald Trump’s presidential election victory.

The Nasdaq composite closed lower, weighed down by a slide in technology companies. Bond prices slumped again, sending yields higher.

“You are seeing a massive swing out of cash and fixed-income and into equities to take advantage of this pro-growth cycle that the market believes we’re beginning,” said David Lyon, global investment specialist at J.P. Morgan Private Bank.

The Dow climbed 218.19 points, or 1.2 percent, to 18,807.88. That’s a gain of about 1 percent from the average’s previous record high set on Aug. 15. The S&P 500 index added 4.22 points, or 0.2 percent, to 2,167.48.

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The Dow and S&P 500 index are on a four-day winning streak. The tech-heavy Nasdaq lost 42.28 points, or 0.8 percent, to 5,208.80.

Investors continued to make moves based on the bevy of possible policy changes that the Trump administration could implement once it takes over in January. Those include cutting taxes, increasing infrastructure spending and slashing government regulation of businesses.

That’s particularly given a boost to financial, industrial and health care stocks, while prompting traders to sell consumer goods companies, utilities and phone companies. Investors have also continued to pull out of bonds in anticipation that Trump’s policies could usher in a stronger economy and, possibly, higher inflation, both of which are bad for bonds.

The sell-off in bonds continued Thursday, sending bond prices lower and kicking the yield on the 10-year Treasury note up to 2.15 percent, the highest it’s been since January, from 2.06 percent late Wednesday. That yield is a benchmark used to set interest rates on many kinds of loans including home mortgages.

Traders have been selling bonds more aggressively to hedge against the possibility that interest rates, which have been ultra-low for years, could rise steadily again under Trump’s administration.

That scenario would favor banks and other financial companies, one reason why the sector continued to rally Thursday. Higher interest rates help banks earn more money from lending, and years of ultra-low rates have crimped profits at big banks.


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