Dow carves out intraday record to start second week of trade in November

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By Steve Goldstein and Mark DeCambre

U.S. stock benchmarks were on the rise Monday, driving the blue-chip Dow to an intraday record, as investors bought energy, materials and financial shares on apparent optimism for the outlook for the economy.

What’s happening

Last week, the Dow, the S&P 500 and the Nasdaq Composite each ended at record highs. The S&P 500 has climbed for six of the last seven weeks and 16 of the last 18 trading sessions.

What’s driving market?

Stock indexes were adding to record gains after the jobs report Friday showed job growth rebounded in October, and healthy quarterly results have helped to support the market’s persistent advance, despite some lingering concerns about inflation and the Federal Reserve’s policy shifts.

“The stock market kicked off November the way it wrapped up October — with bulls in charge,” wrote Chris Larkin, managing director trading E-Trade Financial, in a note.

“Boosted by a vote of confidence from the Fed, the S&P hit new record highs each day to log its strongest week since June and sent small-caps higher,” Larkin said.

Meanwhile, St. Louis Fed President James Bullard told Fox Business that he foresees the central bank raising interest rates twice next year, and that a more rapid pace of interest-rate increases could be adopted if inflation runs hotter than expected.

“If inflation is more persistent, we may have to take action a little sooner,” he told the business network. “We have done a lot to move policy in a more hawkish direction,” the policy maker said. Bullard will be a voting member of the Fed next year.

Read: ‘It’s a melt-up’: U.S. stocks are on an unusually strong run heading into the holidays

The Fed official’s comments come after Friday’s employment report showed the U.S. economy added 531,000 jobs in October, more than the 450,000 jobs that economists surveyed by The Wall Street Journal had expected to see.

It also came after the Fed announced on Wednesday that it will begin to wind down its bond-buying program, as expected, which was designed to prop up the economy during the pandemic.

The Fed however, indicated that the factors boosting inflation are expected to be transitory.

Meanwhile, the House of Representatives approved an infrastructure package, though a larger spending bill remains in doubt.

In corporate news, Elon Musk’s Twitter poll came out in favor of him selling 10% of his stake in Tesla (TSLA), sending the electric vehicle auto maker’s stock down nearly 5% in early action.

Need to Know: What makes Tesla worth $1,400 a share? Here’s why Jefferies has the highest price target on Wall Street

Musk, in a tweet, said he was prepared to accept either outcome. Musk has repeatedly questioned the value of Tesla, and his brother Kimbal sold 88,500 shares on Friday, according to a Securities and Exchange Commission filing.

-Steve Goldstein

Which companies are in focus?

 

(END) Dow Jones Newswires

11-08-21 1017ET

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