While you were sleeping: Wall Street hits record highs

Share investors are rushing back as post-Brexit Britain settled under a new prime minister and the US economy continues to steam ahead.

On Wall Street, the Dow Jones Industrial Average hit a record and the Nasdaq Composite Index turned positive for the year.

The rally has also carried the Standard & Poor’s 500 Index to a new high for the second day in a row.

The rebound of the tech-heavy Nasdaq, combined with the broader market milestones, is an encouraging sign to analysts who had worried about the durability of stock-market gains built on relatively safe trades.

After outpacing other major indexes for the past four years, the Nasdaq lagged its peers in 2016 as investors piled into high-dividend sectors like utilities while pulling out of shares of tech and health-care companies.

“As the environment looks less scary, it makes sense to go after what was perceived as being these riskier, growth-oriented stocks,” Karyn Cavanaugh, senior market strategist at Voya Investment Management told the Wall Street Journal.

“Once people think there’s a little less risk, they’ll go pay for these growth stocks.”

Dow gains 121 points
The Dow rose 120.74 points, or 0.7%, to 18,347.67 to climb past its previous closing record of 18,312.39 set May 19, 2015. The blue-chip index hit six records last year, 38 in 2014 and 52 in 2013, after five years without one.

The S&P 500 added 0.7% to 2152.14. The Nasdaq rose 0.7% to 5022.82, bringing its year-to-date gains to 0.3% and closing in positive territory for 2016 for the first time this year.

As shares rose, so, too, did government bond yields after falling to recent record lows. The yield on the 10-year US treasury note climbed to 1.512%, from its record low of 1.366% on Friday.

Gold, another asset that surged after the UK Brexit referendum, fell 1.5% to $US1334.10 an ounce – its largest one-day percentage decline since May 24.

Meanwhile, US investors are turning their attention to earnings season, which ramps up this week.

In commodity markets, US crude oil prices surged 4.6% to $US46.80 a barrel after Opec said production from non-Opec countries would fall more than previously expected.

Shares in Europe and Asia climbed. The Stoxx Europe 600 rose 1.1% and Japan’s Nikkei Stock Average closed 2.5% higher on hopes for a fresh round of monetary and fiscal stimulus.

The US dollar rose 2.1% against the yen to ¥104.801.

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