Stocks marched higher on Wall Street in afternoon trading Monday, extending the market’s upward momentum as it comes off its best quarter in nearly a decade.
Financial and technology companies powered the rally. Investors tend to favor those sectors when they’re confident the economy will continue growing. Consumer product makers and utility companies, which are considered safe-play investments, lagged the market.
Bond yields continued rising in another sign that investors are confident in the economy’s growth. That came as a welcome relief following a sharp drop in bond yields to their lowest levels in more than a year.
KEEPING SCORE: The Dow Jones Industrial Average rose 258 points, or 1%, to 26,186 as of 1:32 p.m. Eastern Time. The S&P 500 gained 0.9% and the Nasdaq composite climbed 1%. The Russell 2000 index of smaller company stocks picked up 0.8%.
Major European stock indexes also headed higher.
THE ECONOMY: Investors were encouraged to see that a closely watched gauge of the U.S. manufacturing sector posted a surprisingly big jump in March, according to the Institute for Supply Management, an association of purchasing managers. In another positive sign, the government reported that construction spending rose at a solid pace in February.
An economic report out of China showed growth in exports, employment and orders.
ANALYST’S TAKE: The broad move higher for U.S. stocks reflected enthusiasm over the more encouraging data on the economy, said Liz Ann Sonders, chief investment strategist at Charles Schwab, but she cautioned that the market could face some bumps ahead.
“The hurdle in the near-term is still going to be earnings,” she said. “That’s the next important phase.”
Wall Street expects a contraction in earnings during the first quarter, followed by slow growth for the remainder of 2019. Any company commentary about their prospects for the next few quarters will be important in giving analysts and investors a better picture of the economy.
LYFT LOSES LUSTER: Lyft plunged 11.1% on its second full day of trading, falling below its initial public offering price of $72 a share. The ride-hailing company has consistently lost money but has posted supercharged growth.
Its IPO had been seen as a harbinger for other hotly anticipated offerings in fast-growing, privately held companies such as Uber, Pinterest and Slack.
BANKING GETS A BUMP: Bank stocks gained as bond yields rose. Higher bond yields mean that banks can benefit from higher interest rates on loans. JPMorgan Chase rose 2.7%, Citigroup added 3.4% and Capital One Financial climbed 3.3%.
THE HOUSE WINS: Wynn Resorts jumped 7.3% on a solid revenue report from the casino operator’s businesses in Macau and upbeat economic data from China.
KEEBLER ELVES LEARN ITALIAN: Kellogg slid 2.2% on news the packaged foods company is selling its Keebler cookie brand and other sweet snacks businesses to Ferrero, an Italian confectionary company best known for making Nutella, for $1.3 billion.
Kellogg is also selling its Mother’s and Famous Amos cookie brands, as well as its fruit-flavored snack, pie crust and ice cream cone businesses.