U.S. Stocks on Track for Records; Spain Tensions Pressure Euro
Hotel stocks fall after shooting in Las Vegas
Michael Wursthorn
Updated Oct. 2, 2017 12:20 p.m. ET
Major U.S. stock indexes advance
Euro falls after Catalan vote
Spanish bonds, stocks under pressure
Rising shares of health-care and financial companies helped put major indexes on track to hit records Monday.
The Dow Jones Industrial Average rose 77 points, or 0.3%, to 22482 in recent trading, while the S&P 500 added 0.2%. Both indexes were recently trading above their closing highs. The Nasdaq Co mposite slipped 0.1%.
Improving economic data and expectations of solid earnings have helped equity investors brush off a range of geopolitical risks this year. The S&P rose 4% last quarter—its eighth consecutive quarter of advances. Stocks have more room to advance, analysts say, with an unusually high number of S&P 500 companies issuing positive revenue guidance for the third quarter, according to FactSet.
“There’s a still a pretty good mix of economic indicators that is positive for stocks,” said Mark Spellman, portfolio manager at Alpine Funds. “For the first time in a long time, everything is working in unison,” he said, referring to synchronized improvements in growth across major economies.
Health-care stocks rose broadly to gain 0.6% in the S&P 500, with biopharmaceutical companies Regeneron Pharmaceutical and Gilead Sciences up nearly 2% each.
Shares of financial firms rose. Citigroup gained 1.5%, while Goldman Sachs Group added 0.7%, making the bank one of the biggest contributors to the Dow industrials’ gain.
Trading activity has been lighter than usual over the past month, and with little risk currently priced in to the market, things could snowball quickly if anything goes wrong, some money managers said.
“We’re hitting these records on light volume. That means a couple of bad news items or some bad earnings could cause a selloff,” said Larry Peruzzi, managing director of international equity trading at Mischler Financial.
People wave Spanish national flags during a protest against the Catalan independence referendum in Madrid on Sunday.
People wave Spanish national flags during a protest against the Catalan independence referendum in Madrid on Sunday. Photo: marisca/epa-efe/rex/shutterstock/EPA/Shutterstock
Shares of hospitality and entertainment companies fell after a shooting on the Las Vegas Strip left at least 58 dead and more than 500 wounded. Shares of MGM Resorts International were down 5%. MGM operates the Mandalay Bay Hotel and Casino, where police said the gunman was located, and the company said its resorts in the vicinity were on lockdown.
Meanwhile, escalating tensions in Catalonia dented the euro and Spanish assets after voters overwhelmingly backed independence in a referendum Sunday that was boycotted by opponents and marred by violence as Madrid sent in thousands of extra security forces.
The Stoxx Europe 600 rose 0.5% amid support from a weakening euro and British pound—despite a 1.2% drop in Spain’s IBEX 35 index. The euro fell 0.6% to $1.1740.
Asia-Pacific equities were mostly higher, benefiting from gains in the dollar. The WSJ Dollar Index, which tracks the greenback against a basket of 16 currencies, climbed 0.4%.
Australia’s S&P/ASX 200 rose 0.8% and Japan’s Nikkei Stock Average added 0.2%.
Markets in China and South Korea will be shut all week, while those in Hong Kong and India were closed for holidays Monday.
Oil prices were weaker amid a stronger dollar and signs of rising global production, with U.S. crude recently down 2.7% at $50.27 a barrel.
Write to Riva Gold at
riva.gold@wsj.com and Michael Wursthorn at
Michael.Wursthorn@wsj.com