Dow Climbs Back Above 22000 as Fears Ease
The S&P 500 hit a fresh record and the Dow Jones Industrial Average closed above 22000 for the first time in nearly a month, as investors' fears eased about North Korea and Hurricane Irma.
Stocks rose broadly and haven assets retreated Monday, a reversal from last week when major U.S. stock indexes, the dollar and Treasury yields fell as investors worried about worst-case scenarios from summer storms and threats from North Korea.
The gains catapulted the Dow up 259.58 points, or 1.2%, to 22057.37, its biggest one-day gain in six months. The last time the Dow industrials closed above 22000 was Aug. 16, and prior to Monday they hadn't posted a 1% gain since April.
The S&P 500 rose 26.68 points, or 1.1%, to 2488.11 Monday -- its 31st record close of 2017 -- and the Nasdaq Composite jumped 72.07 points, or 1.1%, to 6432.26.
Some analysts had expected North Korea to conduct a weapons test on Saturday, coinciding with the country's founding day, as it did last year to mark the celebration. The absence of news from Pyongyang supported stocks and the dollar, while weighing on haven assets, analysts say.
"That North Korea didn't do anything, on a weekend they knew our country was going to be in flux because of hurricanes, is the primary reason we're seeing this big rally," said JJ Kinahan, chief market strategist at TD Ameritrade. "The market has gone back up to where we were in early August before these North Korea fears."
Government bond prices declined, pushing up yields. The yield on the 10-year U.S. Treasury note rose to 2.125% from 2.058% Friday, its largest one-day yield rise in more than a month.
Meanwhile, concerns about Hurricane Irma's impact on the U.S. economy decreased. A reduction in the storm's strength and a shift in its expected course -- there was no direct hit on Miami -- meant insured damage estimates were likely to be less than originally anticipated by some analysts.
Reinsurance companies, which tumbled last week, jumped on Monday. The KBW Nasdaq Insurance index rose 1.8%, nearly wiping out its 1.9% drop last week.
The WSJ Dollar Index, which measures the U.S. dollar against a basket of other currencies, rose 0.7%, after sinking to its lowest level in more than two years on Friday. The euro fell 0.7% against the greenback, paring some of last week's gains, to trade at $1.1951.
The Stoxx Europe 600 rose 1%, boosted by gains in bank, insurance and technology shares -- sectors that tend to rally when investors feel confident enough to take on more risk.
Gold, another traditional haven for money managers, fell 1.1%. The yen and the Swiss franc, which traditionally rise when markets are volatile, both fell against the U.S. dollar.
A weaker yen boosted Japanese blue-chip stocks. Japan's Nikkei Stock Average rose 1.4%, after setting fresh four-month lows on Friday and logging its worst week in seven months.
Write to Corrie Driebusch at corrie.driebusch@wsj.com
(END) Dow Jones Newswires
September 11, 2017 16:46 ET (20:46 GMT)