S&P 500 hits one other file after banks hike dividends and home costs skyrocketed

The S&P 500 hit a record high Tuesday morning as bank stocks and other cyclical factors related to the economic recovery rose.

The broad market index rose 0.2%, building on a record close from the previous session. The Dow Jones Industrial Average rose 120 points while the tech-heavy Nasdaq Composite rose 0.1%.

Morgan Stanley shares rose more than 3% in morning trading after the bank announced it would double its quarterly dividend. The bank also announced a $ 12 billion share buyback program. The announcement follows last week’s Federal Reserve stress tests that all 23 major banks passed.

Wells Fargo announced it would double its dividend to 20 cents per share, pending board approval, and announced a $ 18 billion buyback plan. Bank of America, Goldman Sachs and JPMorgan also announced dividend increases.

Boeing shares rose more than 1% in early trading after United Airlines announced it would buy 200 Max aircraft. General Electric also boosted its industrial sector, up 2% after Goldman Sachs named the stock a top idea.

Home builder stocks rose after S&P Cash Shiller said home prices were up more than 14% year over year in April. Five US cities, including Seattle, saw their largest annual increase on record. Lennar and PulteGroup shares rose nearly 2%.

The early strength in cyclical and value stocks on Tuesday weighed against some of the recent rallies in growth and technology stocks. Andrew Smith, chief investment strategist at Delos Capital Advisors in Dallas, said he expected these groups to continue jockeying back and forth over the coming months.

“It’s not really going to be one of those simple rotations we’ve had in the past where all profits come out of value or ETF asset flows go out of value and into growth. I think it’s going to be a back and forth choppy market, “Smith said, adding that he recommends investors add defensive stocks rather than just rely entirely on growth.

The Conference Board’s consumer confidence for June was higher than expected, adding to bullish readings on the economic recovery.

With the market entering the final trading days of June and the second quarter, the S&P 500 is well on its way to posting profits for the fifth straight month. The Nasdaq is approaching its seventh positive month in the past eight months. However, the Dow is in the red for the month and is well on its way to a four month winning streak.

By Monday’s close of trading, the S&P 500 was up 14% and the Dow and Nasdaq were up 12% through 2021.

“The markets have got off to a good start this year,” said Ryan Detrick, chief market strategist at LPL Financial. “Most of those gains came early in the year, however, and many stocks have stagnated in recent months,” he added. Detrick believes investors should overweight stocks versus bonds, but noted some market concerns, including increased valuations.

JPMorgan’s quantitative strategist, Dubravkos Lakos-Bujas, on CNBC’s “Squawk Box” said the market appears to have upside potential in the short term.

“In our opinion, the growth policy background remains supportive for risk assets in general, and certainly also for equities. At the same time, the positioning is not really extended to problematic terrain. So we think there is still a runway. “… In the summer, in the next two months, I think the market will continue to break out,” said the strategist.

On Wall Street, stocks hit new highs during Monday’s regular trading amid the strength of big tech. The S&P 500 rose 0.23% to hit its third record high in a row. The Nasdaq was up nearly 1%, posting its fifth positive session in the last six, and also closing at a new high. However, the Dow lost 151 points due to a withdrawal from Boeing and Chevron, among others.

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