More big gains for blue-chip banking and oil stocks pulled the Dow Jones industrial average to another record high Thursday, but most other U.S. stocks headed in the opposite direction.
Technology companies are plunging and on are track for their biggest loss in two months. High-dividend stocks are also trading lower as bond yields rise.
ON WALL STREET: The Dow was up 68.4 points, about 0.4 percent, at 19,191.9, a record. The Standard & Poor’s 500 index lost 7.7 points, about 0.4 percent, to 2,191.1. The Nasdaq composite sank 72.6 points, about 1.4 percent, to 5,251.1.
OIL PRICES: Oil prices rallied again and reached their highest level since mid-October. As markets closed, the price of U.S. benchmark crude was up $1.52 at $51.86 a barrel in trading on the New York Mercantile Exchange. The contract surged $4.21 on Wednesday, the biggest one-day gain since February. In London on Intercontinental Exchange Europe, Brent crude, the international benchmark, rose $1.91 to $53.75 a barrel.
BANKS BOOM: Bond prices continued to tumble, sending benchmark yields higher. The yield on the 10-year Treasury note rose to 2.44 percent from 2.38 percent, its highest since July 2015. That sent bank stocks higher because higher bond yields are linked to higher interest rates, which allow banks to make more money from lending. The Goldman Sachs Group became the biggest gainer on the Dow this year as it rose $5.79, or 2.6 percent, to $225.08 and JPMorgan Chase picked up $1.47, or 1.8 percent, to $81.64. Goldman is trading at its highest price since 2007.
STRONG DOLLAR HURTS TECH: After a big gain Wednesday, the dollar slipped to 114.03 yen from 114.22 yen. The euro rose to $1.0649 from $1.0599. In the last few weeks the dollar has reached a 13-year high compared to other currencies. A strong dollar hurts profits and sales for companies that do a lot of business overseas, and the technology companies on the S&P 500 get almost 60 percent of their revenue outside the United States. Facebook skidded $2.74, or 2.3 percent, to $115.68 and chipmaker Analog Devices dropped $4.53, or 6.1 percent, to $69.71. Microsoft lost 95 cents, or 1.6 percent, to $59.31.
LOOKS FAMILIAR: Stocks are largely following the pattern that has held since the presidential election, with banks and industrial companies gaining ground. Technology companies are falling. So are stocks that pay large dividends, like utilities and real estate companies, as rising bond yields make those stocks less attractive to investors who are seeking income.
ANALYST’S OPINION: A big postelection rally has faded in the last few days, but analyst Karyn Cavanaugh, senior market strategist for Voya Investment Strategies, thinks major indexes will move higher. She noted that corporate earnings grew in the third quarter for the first time in more than a year, and U.S. manufacturing has been recovering.
“We’ve been so starved for anything that could even resemble growth,” she said. “If the U.S. is doing better, then that’s going to help the whole entire global economy do better.”