The Dow Jones posts 5th straight record close

NEW YORK — US stocks closed higher on Monday (Sept 18) as investors looked ahead to a key Federal Reserve meeting. Wall Street also cheered a big defense industry deal.

The Dow Jones Industrial Average rose 63.01 points, or 0.28%, to 22,331.35 and posted its fifth straight record close. The S&P 500 gained 3.64 points, or 0.15%, to 2,503.87; and the Nasdaq Composite added 6.17 points, or 0.1%, to 6,454.64.

The S&P 500 ended slightly higher on Monday as financial stocks rose ahead of a Federal Reserve meeting, but the Nasdaq pared gains sharply as technology stocks lost ground late in the session.

Five of the 11 major S&P sectors ended lower. Rising US Treasury yields boosted financial stocks, as higher interest rates tend to lift bank profits, but rate-sensitive sectors such as utilities were the weakest.

The Fed meeting, which starts on Tuesday, is expected to yield details on how the central bank will unwind its US$4.2 trillion (S$5.65 trillion) portfolio of Treasuries and mortgage-backed securities, nearly a decade after the global financial crisis.

After pushing the S&P above its 2,500-point milestone last week, investors were holding their fire as they awaited more clues on the timing of the next rate hike from Fed Chair Janet Yellen.

“You just had that little momentum spurt after it went through 2,500 but it is kind of running out of steam and is going to bide its time until Wednesday, when they listen to Janet” said Mr Ken Polcari, director of the NYSE floor division at O’Neil Securities in New York.

“There’s momentum in the market. There’s lots of cash. Even though the Fed’s about to reduce their balance sheet, you continue to have incredibly aggressive monetary policy. That continues to lead to money flowing into the market almost in an indiscriminate fashion,” said Mr Stephen Massocca, senior vice president at Wedbush Securities in San Francisco.

Big technology stocks such as Microsoft and Google parent Alphabet came under pressure late in the session after Amazon said it would move to charging businesses in one-second increments for use of its servers.

“That competes with Google and Microsoft, and it’s going to weigh on the entire tech space” because of price competition, said Mr Michael O‘Rourke, chief market strategist at JonesTrading in Greenwich, Connecticut.

Microsoft shares ended down 0.2% while Alphabet was off 0.6%, with both stocks seeing a pickup in volume late in the day.

Advancing issues outnumbered declining ones on the NYSE by a 1.36-to-1 ratio; on Nasdaq, a 1.55-to-1 ratio favoured advancers.

About 5.97 billion shares changed hands on US exchanges on Monday, compared with the 5.91 billion average for the last 20 sessions. AGENCIES