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Dow And S&P 500 Climb To New Record Intraday Highs - U.S. Commentary


Stocks have moved mostly higher in morning trading on Monday following the mixed performance seen in the previous sessions. With the upward move on the day, the Dow and the S&P 500 have reached new record intraday highs.

While the Dow and the S&P 500 have moved to the upside, the Nasdaq has moved modestly lower, edging down 5.68 points or 0.1 percent to 6,841.91. The Dow is up 287.36 points or 1.2 percent at 24,518.95 and the S&P 500 is up 18.14 points or 0.7 percent at 2,660.36.

The strength on Wall Street comes after Senate Republicans narrowly approved a massive tax reform bill early Saturday morning.

The Senate voted 51 to 49 in favor of the bill known as the Tax Cuts and Jobs Act, with the vote largely coming down along party lines.

Senator Bob Corker, R-Tenn., was the only Republican to vote against the bill amid concerns about the legislation's impact on the budget deficit.

"With the great vote on Cutting Taxes, this could be a big day for the Stock Market - and YOU!" President Donald Trump said in a post on Twitter.

With the vote to approve the bill, lawmakers from the Senate and House will need to go to conference to work out differences in the bills passed by the two chambers.

On the U.S. economic front, the Commerce Department released a report showing a modest decrease in new orders for manufactured goods in the month of October.

The report said factory orders edged down by 0.1 percent in October after surging up by 1.7 percent in September. Economists had expected orders to drop by 0.4 percent.

Transportation stocks have shown a substantial move to the upside on the day, driving the Dow Jones Transportation Average up by 2.9 percent. With the gain, the average has reached a new record intraday high.

American Airlines (AAL), Southwest Airlines (LUV), FedEx (FDX) and Union Pacific (UNP) are turning in some of the transportation sector's best performances.

Significant strength is also visible among banking stocks, as reflected by the 2.9 percent gain being posted by the Dow Jones Banks Index. The index has climbed to its best intraday level in ten years.

Steel, brokerage, and housing stocks are also seeing notable strength, while weakness among semiconductor, software, and internet stocks is contributing to the drop by the tech-heavy Nasdaq.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Monday. Japan's Nikkei 225 Index fell by 0.5 percent, while Hong Kong's Hang Seng Index rose by 0.2 percent.

Meanwhile, the major European markets have all moved to the upside on the day. While the U.K.'s FTSE 100 Index has risen by 0.5 percent, the French CAC 40 Index and the German DAX Index are up by 1.4 percent and 1.6 percent, respectively.

In the bond market, treasuries are giving back ground following the strong upward move seen last Friday. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is up by 2.5 basis points at 2.387 percent.

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