Nasdaq hits a new all-time high as stocks rise

Banks and other financial companies led U.S. stocks modestly higher Thursday, nudging the Nasdaq composite index to an all-time high.

Rising bond yields, which can result in higher interest rates on loans and bigger profits for banks, helped put traders in the mood to buy banking stocks. Energy companies notched gains as crude oil prices rose. Utilities and other high-dividend stocks fell.

Investors also bid up shares in companies that released strong quarterly results or announced big transactions. ConocoPhillips jumped after agreeing to sell most of its Canadian assets.

“Equities are ending the first quarter in a reasonably good place,” said Terry Sandven, chief equity strategist at U.S. Bank Wealth Management. “I do think equities trend sideways, probably for the next month. The rally since the election has centered around improved sentiment regarding tax reform and infrastructure spending, and that’s still a work in progress.”

The Dow Jones industrial average rose 69.17 points, or 0.3%, to 20,728.49. The Standard & Poor’s 500 index rose 6.93 points, or 0.3%, to 2,368.06. The Nasdaq rose 16.80 points, or 0.3%, to 5,914.34. Small-company stocks fared better than the other indexes, sending the Russell 2000 index up 10.70 points, or 0.8%, to 1,382.35. The four stock indexes last set record highs March 1.

Bond prices edged down. The 10-year Treasury yield rose to 2.41% from Wednesday’s 2.38%.

Trading was mostly subdued early Thursday after mixed action in overseas markets. But soon investors got another batch of encouraging economic news: The Commerce Department raised its estimate for economic growth in the fourth quarter to 2.1% from 1.9%, saying consumer spending increased more than expected. And the Labor Department said applications for unemployment benefits fell slightly last week.

The latest economic data followed positive reports on consumer confidence and housing earlier this week.

“Today’s action and the little bit of strength we’ve seen the past couple of days is maybe investors focusing a little bit more on fundamentals and the fact that the economy and earnings are in the same trajectory as they were two weeks ago when the markets were at all-time highs, and we’re slightly below that,” said Sean Lynch, co-head of global equity strategy at Wells Fargo Investment Institute.

Financial sector stocks rose 1.2%, the biggest gain among the 11 sectors in the S&P 500. The sector, which is up 2.8% this year, accounted for more than half of the index’s gains Thursday.

Traders bid up shares in big banks such as Capital One Financial, which rose 2.9% to $87.14.

“What we know is that probably interest rates are rising and the Fed is going to raise rates, and that probably less regulation is on the way, and that might be why sometimes you see financials kick up on a day like this,” Lynch said.

ConocoPhillips jumped 8.8% to $50 after the energy company agreed to sell most of its Canadian assets to Canada’s Cenovus Energy in a deal valued at $13.2 billion. The stock was the biggest gainer in the S&P 500.

Extreme Networks surged 14.2% to $7.38 after the San Jose maker of network infrastructure equipment agreed to buy a data center, switching, routing and analytics business from Brocade Communications once Brocade is acquired by Broadcom.

Several companies rose after turning in strong quarterly results. Irrigation equipment maker Lindsay climbed 7.9% to $87.81.

Other companies failed to impress traders.

Lululemon dived 23.4% to $50.76 the day after the yoga clothing company released a forecast for the quarter that fell well short of Wall Street’s expectations.

Science Applications International tumbled 13.1% to $74.97 after the information technology company’s latest quarterly results missed estimates. The company cited a variety of problems, including delays and declines in contract work.

World stocks were mixed. In Europe, Germany’s DAX and France’s CAC 40 each gained 0.4%, while Britain’s FTSE 100 slipped 0.1%. Earlier, some Asian indexes fell after Chinese authorities tightened liquidity in the financial system of the world’s second-largest economy. Hong Kong’s Hang Seng shed 0.4%, while Tokyo’s benchmark Nikkei 225 index lost 0.8%. South Korea’s Kospi slipped 0.1%. Southeast Asian indexes were mixed. Australia’s S&P/ASX 200 rose 0.4%.

In energy futures trading, benchmark U.S. crude oil rose 84 cents, or 1.7%, to $50.35 a barrel. Brent crude, used to price international oils, rose 54 cents, or 1%, to $52.96 a barrel. Natural gas slipped 4 cents to $3.19 per 1,000 cubic feet, wholesale gasoline rose a penny to $1.68 a gallon and heating oil rose 2 cents to $1.56 a gallon.

Gold fell $8.70 to $1,245 an ounce. Silver fell 5 cents to $18.21 an ounce. Copper fell a penny to $2.67 a pound.

The dollar rose to 111.60 yen from 111.03 yen. The euro fell to $1.0691 from $1.0760.

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UPDATES:

2:40 p.m.: This article was updated with closing prices, context and analyst comments.

8:05 a.m.: This article was updated with market prices and context.

This article was originally published at 7 a.m.