While you were sleeping: Wall St pares gains after fresh records

Wall Street moved higher, paring some gains after rallying to record highs amid optimism about the US economic outlook and corporate profits.

Meanwhile, investors eyed a meeting by the Federal Reserve, which is set to tighten monetary policy.

The Federal Open Market Committee begins its next two-day meeting on Tuesday. It's expected to keep its key interest rate steady but begin unwinding its balance sheet.

"QE certainly is over; QT is about to begin," Anthony Crescenzi, Pimco portfolio manager, told Bloomberg. "That's quantitative tightening. It's illogical to think that quantitative easing would help markets but quantitative tightening won't hurt. It seems markets are taking the Fed's quantitative tightening in stride. It will be like Fed Chair Janet Yellen has said, like watching paint dry."

At the close of trading in New York, the Dow Jones Industrial Average added 63.01 points, or 0.3%, to 22,331.35, its fifth consecutive high and the 40th this year. The Nasdaq Composite Index edged up 0.1% to 6454.64 and the Standard & Poor's 500 Index rose 0.15% to 2503.87, a new closing high.

Earlier, the Dow touched a record high 22,355.39, while the S&P 500 climbed to a record 2508.32 and the Nasdaq reached a record 6477.77.

Bond yields keep rising
US Treasuries declined, pushing yields on the 10-year note two basis points higher to 2.230%, up from 2.202% on Friday and the highest in more than a month.

The Dow rose as advances in shares of General Electric and those of Caterpillar, up 2.2% and 1.9% respectively, outweighed declines in shares of Apple and those of Nike, down 1.0% and 0.7% respectively.

In fresh deal news, shares of Orbital ATK soared 20.2% after Northrop Grumman said it agreed to buy the missile and rocket maker for about $US7.8 billion in cash. Northrop's shares traded 3.35% higher in New York.

Buying Orbital would make Northrop the fourth-largest Pentagon contractor, displacing Raytheon, according to Bloomberg.

"Clearly, as we watch what's happening around our globe, the rather rapid advance of some of our potential adversaries is quite concerning," Northrop Chief Executive Wes Bush said on a call with analysts, Reuters reported.

Shares of Nvidia continued their rally, touching a fresh record high, as analysts upgraded their outlooks for the company. Bank of America Merrill Lynch analyst Vivek Arya raised his price target on Monday by $US25 to $US210, the second highest on the Street behind Evercore ISI's $US250, according to Reuters.

In Europe, the Stoxx 600 Index ended 0.3% up from the previous close. France's CAC 40 Index rose 0.3%, Germany's DAX Index also added 0.3% and the UK's FTSE 100 Index climbed 0.5%.

(BusinessDesk)