U.S. equities kicked off the second half of the year on the right foot, closing mostly higher on Monday as bank stocks climbed.
The Dow Jones industrial average notched a record high before closing about 130 points higher, with Goldman Sachs contributing the most gains. The S&P 500 rose 0.23 percent, with financials and energy leading advancers. The Nasdaq composite lagged, trading 0.5 percent lower.
“You’re still seeing money coming out of tech and into financials,” said Marc Chaikin, CEO of Chaikin Analytics. “The rally in financials has real legs.”
Shares of Morgan Stanley, JPMorgan Chase, Wells Fargo and Citgroup all rose in early trade. The big bank stocks are coming off a strong week, with the SPDR S&P Bank exchange-traded fund (KBE) surging 3.82 percent after positive results from the Federal Reserve’s annual stress test.
“There’s new leadership emerging in the market,” said Peter Cardillo, chief market economist at First Standard Financial. “That should keep us from faltering during the summer months.”
Energy stocks also caught a bid, with the Energy Select Sector SPDR ETF (XLE) advancing 1.9 percent.
Stocks posted a strong first-half performance, led largely by the technology sector. But tech ended the first half on a sour note, with the Technolgy Select Sector Fund (XLK) sliding 2.81 percent last week.
But Dave Haviland, managing partner at Beaumont Capital Management, said it’s too early to worry about the stock market. “If you have a market that’s giving you new highs every month, then you take what the market gives you, until the overall trend turns negative,” he said.
Monday also marked the start of a shortened trading week. The New York Stock Exchange closed at 1 p.m. Monday and will be closed Tuesday because of the Fourth of July holiday.
July 3 has historically been a strong day for stocks, according to data from Bespoke Investment Group. Since 1928, the S&P 500 has averaged a one-day change of positive 0.5 percent, with positive returns nearly 73 percent of the time.
That said, Wall Street digested key data, including the IHS Markit U.S. Manufacturing PMI index for June, which slipped to 52.0 from 52.7 in May.
Other data set for released Monday included the ISM manufacturing index for June, which rose to 57.8 from 54.9 in May. Monthly auto sales numbers will also be rolled out throughout the day.
Later this week, the Federal Reserve will release the minutes from its June meeting and the Bureau of Labor Statistics is scheduled to release its monthly jobs report Friday.
The Dow Jones industrial average rose 129.64 points, or 0.61 percent, to close at 21,479.27, with Goldman Sachs leading advancers and Microsoft lagging.
The S&P 500 gained 5.61 points, or 0.23 percent, to end at 2,429.02, with energy leading seven sectors higher and information technology underperforming.
The Nasdaq fell 30.36 points, or 0.49 percent, to close at 6,110.06.
About three stocks advanced for every decliner at the New York Stock Exchange, with an exchange volume of 492.05 million and a composite volume of 3.794 billion at the close.
The CBOE Volatility Index (VIX), widely considered the best gauge of fear in the market, traded near 11.2.