The Dow Jones Industrial Average closed at its first record high since the summer as the stock market’s rally carried into a fifth week and more in Monday’s Stock Market Update.

Energy and technology companies did the most to pull the market higher Monday.

Chevron (CVX) rose 4.6% and chipmaker Nvidia (NVDA) rose 3.9%.

Under Armour (UAA) slumped 18.9% after the company confirmed that its accounting practices are being investigated by federal regulators.

McDonald’s (MCD) sank 2.7% after its CEO was ousted after violating company policy by having a relationship with an employee.

The rising optimism was evident not only in major U.S. stock indexes but also in rising yields for Treasurys. When investors feel less need for safety, the crowd thins to buy Treasury bonds. And when prices fall for Treasurys, their yields rise.

“Investors are doing what we’re theoretically supposed to be doing: We’re looking out at the next 12 to 18 months and investing on the basis of where it’s going, not on where we’re at today,” said Tom Stringfellow, chief investment officer at Frost Investment Advisors.

“We are investing on expectations that whatever the worst is, we’re there now.”


KEEPING SCORE: The S&P 500 rose 11 points, or 0.4%, to 3,078. The Dow climbed 114 points, or 0.4%, to 27,462. The Nasdaq rose 46 points, or 0.6%, to 8,433.

YIELDS: The yield on the 10-year Treasury climbed to 1.77% from 1.72% late Friday. Not only that, the gap between the yields of the 10-year and two-year Treasurys widened, which many on Wall Street see as a sign of increased confidence in the economy.

The two-year yield rose to 1.58% from 1.55%, and the 0.20 percentage point difference between it and the 10-year yield was close to its largest since late July.

BANKING ON PROFITS: The widening gap in yields helps banks, which make money by borrowing money at short-term rates and lending it out at longer-term rates while pocketing the difference.

Financial stocks in the S&P 500 climbed 1% for one of the largest gains among the 11 sectors that make up the index. Bank of America climbed 1.9%, and Citigroup added 1.7%.

ENERGIZED CYLICALS: Other cyclical sectors, such as energy and industrials, were also ahead of the pack.

Exxon Mobil added 2.9% as energy stocks overall climbed 3.2% after the price of oil climbed.

A 5.3% jump for General Electric (GE) and a 2.8% rise for 3M, meanwhile, helped drive industrial stocks in the S&P 500 to a 1% rise.

It’s a reprieve for cyclicals, which have been becoming a smaller part of the stock market as investors focused instead on defensive stocks or companies that can grow no matter what the economy is doing, such as, Apple and other big technology companies.

Cyclical companies make up about 34% of the S&P 500, down from 41% in early 2018, according to James Paulsen, chief investment strategist at the Leuthold Group.

DOWN DEFENSE: Defensive stocks, meanwhile, lagged. Utilities fell 1.3% for the largest loss in the S&P 500, and real-estate stocks were down 0.9%.

HOW MUCH LONGER: Part of the reason for the shift into cyclical stocks may simply be the calendar. It’s what typically happens late in the year, said Sam Stovall, chief investment strategist at CFRA.

“People’s mindset shifted from a defensive ‘Sell in May’ approach to the more cyclical approach, as is usually the case,” he said.

But the shift doesn’t necessarily mean the all-clear for the economy and the market. Barry Bannister, head of institutional equity strategy at Stifel, sees cyclical stocks doing better than defensive stocks into the middle of 2020, but he sees the S&P 500 falling back to 3,050 by the end of the year and rising to only 3,100 in 2020.

WEEK AHEAD: Wall Street has less to focus on this week following last week’s steady flow of corporate results and economic reports. The U.S. government will release international trade data on Tuesday and investors will keep a close watch on the latest service sector survey, also expected Tuesday. CVS will report its latest earnings on Wednesday and Walt Disney will report its latest results on Thursday.

PIERCED ARMOR: Under Armour plunged 18.9% following revelations its accounting practices have been under federal investigation for two years. The company confirmed that it has been cooperating with the U.S. Securities and Exchange Commission and the U.S. Department of Justice.

OVERSEAS: European and Asian markets rose broadly. Japan’s market was closed for a holiday.

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