Stocks rose on Monday as the Dow Jones Industrial Average continued its march toward the psychologically important 20,000, a level it flirted with last week.
The S&P 500 was up 0.37%, the Dow gained 0.32%, and the Nasdaq rose 0.75%.
The blue-chip index is just one big rally away from the milestone. The Dow has moved within 50 points of the target, but hasn't yet clinched it.
"The path to Dow 20,000 continues in this post-election rally," Jim Davis, regional investment manager at U.S. Bank, told TheStreet. "Investors ... have zeroed in on the Trump growth agenda of tax cuts, infrastructure spending and deregulation. This optimism has been reinforced by economic data showing that the economy is solid and inflation is creeping higher. Although the Trump trade seems a bit crowded, equity prices are likely to grind higher through year end."
The move would be psychologically important, though analysts noted that the Dow holds less significance as a barometer of the markets' health than the more diverse S&P 500.
"Dow 20,000 certainly sounds great, but there are a few things one should keep in mind before putting too much emphasis on it," Andrew Adams, market strategist at Raymond James, wrote in a note. "Remember that the DJIA consists of just 30 U.S. stocks, so it is not as representative of the broad market as it used to be, which is why the S&P 500 is more widely used for benchmarking purposes."
Shares of Walt Disney (DIS) led the Dow higher following a strong showing over the weekend for Disney's first Star Wars spinoff and after Bank of America/Merrill Lynch added Disney to its "US 1 list" of best investment picks. The stock gained 1.9%.
Wall Street awaited an early afternoon speech from Federal Reserve Chair Janet Yellen on the state of the labor market. Yellen will take the stage at the University of Baltimore 2016 Midyear Commencement in Maryland early Monday afternoon. The speech is the last of Fed-talk for the year and the first remarks since the central bank opted to hike rates by 25 basis points at its meeting last week. The Fed also telegraphed a faster pace of hikes, pegging its 2017 forecasts for three moves, up from two.
"In light of Yellen's shift in tone in highlighting 'diminished' slack in labor markets, which implies a closer proximity to full employment, further clarification is possible," TD Securities analysts wrote in a note.
Monday also kicked off a slower week as trading desks empty out ahead of the Christmas and New Year's break. Still, there will be a number of data points for investors to trade on including existing home sales on Wednesday, the third and final estimate of third-quarter gross domestic product, and durable goods orders on Thursday, and new home sales data on Friday. This is the final full week of trading of the year.
Managing director of the International Monetary Fund, Christine Lagarde, was found guilty of criminal charges tied to misuse of public funds while in her position as finance minister of France. Lagarde began her second term at the IMF in February following her first five-year term. The charges could force her to resign from the position.
Oil prices fluctuated Monday as worries resurfaced over whether major oil-producing nations could adhere to a recent production cut agreement. Organization of Petroleum Exporting Countries recently agreed to cut output to 32.5 million barrels a day, a limit to go into effect in January. However, OPEC's output remains at record highs with just two weeks left in the year. OPEC members have to cut production by more than 1 million barrels a day.
West Texas Intermediate crude oil was flat at $51.87 a barrel.
Lennar (LEN) rose 2% Monday after exceeding profit and sales estimates in its fiscal fourth quarter. The homebuilder earned $1.34 a share over its recent quarter, up from $1.21 a share a year earlier and above estimates of $1.28. Revenue rose nearly 15% to $3.38 billion, topping consensus of $3.3 billion. CEO Stuart Miller projected a sunny outlook, pointing to President-elect Donald Trump's plans for economic spending as reason for higher expectations of company growth.
Merck (MRK) was downgraded to underperform at Jefferies. The firm said earnings estimates are below consensus as drug Keytruda should continue to face pressure.
United Technologies (UTX) was upgraded to outperform from neutral at Credit Suisse. Profit margin and earnings momentum are near a bottom, Credit Suisse said.
Costco (COST) was upgraded to buy from neutral at Citi. The firm said short-term headwinds were fading and that its valuation had become more attractive.
Allied World Assurance (AWH) surged after Fairfax Financial Holdings agreed to an acquisition. Fairfax agreed to pay $4.9 billion in cash and stock for the Swiss insurer. The deal valued Allied at a 18% premium to its Friday close.