U.S. Stocks Muted After Notching Records

By Mike Bird and Ese Erheriene Features Dow Jones Newswires

U.S. stock indexes wobbled around the flatline Monday after climbing to a trifecta of records the previous week.

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The Dow Jones Industrial Average fell 14 points, or less than 0.1%, to 23527 shortly after the opening bell. The S&P 500 was down less than 0.1% and the Nasdaq Composite was up less than 0.1%.

The three indexes climbed to fresh highs together Friday, pulling off the feat for the 25th time in 2017.

Solid corporate earnings growth and a pickup in growth across economies around the world have helped U.S. stocks climb this year, investors and analysts say, even as some have warned that valuations look stretched.

Policy changes in Washington could help push stocks and bond yields even higher, some analysts said. The Ways and Means Committee of the U.S. House of Representatives is expected to turn its attention to tax reform this week, with the aim of passing a proposed bill before Christmas.

"In terms of the impact on equity markets we think it might put something like another 5% on earnings, but you'd expect interest rates to rise maybe a little bit faster," said Mike Bell, global market strategist at J.P. Morgan Asset Management.

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"It is a risk for bond yields, because I just don't think it's priced in, " Mr. Bell said. "We're underweight bonds."

Government bonds ticked up Monday, with the yield on the benchmark 10-year U.S. Treasury note recently at 2.327%, according to Tradeweb, compared with 2.334% Friday. Yields fall as bond prices rise.

Elsewhere, the Stoxx Europe 600 index edged up 0.1%, buoyed by gains in shares of basic resources companies.

In Asia, Hong Kong's Hang Seng Index fell by as much as 1.6% earlier in the session, before reversing losses to close down less than 0.1%.

Japan's Nikkei Stock Average reversed early gains, as traders returned after a three-day weekend. The index closed up less than 0.1%.

The yen pared early sharp declines against the U.S. dollar, when Bank of Japan Gov. Haruhiko Kuroda said the central bank would be patient about easing. The dollar was last up 0.1% against the dollar.

Akane Otani contributed to this article.

Write to Mike Bird at Mike.Bird@wsj.com and Ese Erheriene at ese.erheriene@wsj.com

Gains in shares of energy companies pulled U.S. stock indexes higher Monday.

The Dow Jones Industrial Average rose 3 points, or less than 0.1%, to 23541. The S&P 500 added 0.1% and the Nasdaq Composite was up 0.2%.

Solid corporate earnings growth and a pickup in growth across economies around the world have helped U.S. stocks climb this year, investors and analysts say, even as some have warned that valuations look stretched.

"The question is whether valuations are already reflecting all of the good news -- whether it's economic growth or tax reform -- and then trying to determine where that leaves us with stocks," said Dan Miller, director of equities at GW&K Investment Management.

Shares of energy companies rose 1% in the S&P 500 on Monday, among the biggest gainers of the broad index's 11 sectors.

Chesapeake Energy jumped 8%, while Apache rose 4.4%.

Meanwhile, corporate news drove swings in other sectors.

Broadcom shares ticked up 0.1% after the firm launched a takeover bid for fellow chip maker Qualcomm in a deal worth $100 billion. Qualcomm shares jumped 1.8%.

Sprint shed 14% and T-Mobile fell 5.6% after the two companies officially called off their merger Saturday, putting an end to a deal that would have combined the No. 3 and No. 4 wireless carriers in the U.S.

Government bonds ticked up Monday, with the yield on the benchmark 10-year U.S. Treasury note recently at 2.325%, according to Tradeweb, compared with 2.334% Friday. Yields fall as bond prices rise.

Policy changes in Washington could help push stocks and bond yields even higher, some analysts said. The Ways and Means Committee of the U.S. House of Representatives is expected to turn its attention to tax reform this week, with the aim of passing a proposed bill before Christmas.

"In terms of the impact on equity markets we think it might put something like another 5% on earnings, but you'd expect interest rates to rise maybe a little bit faster," said Mike Bell, global market strategist at J.P. Morgan Asset Management.

Elsewhere, the Stoxx Europe 600 index edged up 0.2%, buoyed by gains in shares of basic resources companies.

In Asia, Hong Kong's Hang Seng Index fell by as much as 1.6% earlier in the session, before reversing losses to close down less than 0.1%.

Japan's Nikkei Stock Average reversed early gains, as traders returned after a three-day weekend. The index closed up less than 0.1%.

The yen pared early sharp declines against the U.S. dollar, when Bank of Japan Gov. Haruhiko Kuroda said the central bank would be patient about easing. The dollar was last up 0.1% against the dollar.

Ese Erheriene contributed to this article.

Write to Akane Otani at akane.otani@wsj.com and Mike Bird at Mike.Bird@wsj.com

(END) Dow Jones Newswires

November 06, 2017 11:29 ET (16:29 GMT)