the dow jones industrial average inched higher to its third consecutive record close monday, as gains in bank shares offset declines in technology stocks. investors have been shifting their money since donald trump <u+2019>s victory as u.s. president last tuesday. some of the most popular bets have reflected expectations of stronger growth and higher inflation, sending government-bond yields and financial stocks higher. bank of america rose $1.06, or 5.6%, to $20.08<u+2014>its highest close since november 2008. u.s. stock-trading volume has been above the 2016 daily average for the four sessions following the election, according to wsj market data group. as bonds tumbled, so have dividend-paying stocks such as utilities and telecommunications companies, which investors bought this year for their steady income amid ultralow interest rates. in the s&p 500, technology shares , other recent winners, rose 12% in the third quarter but are down 3.3% since sept. 30, with most of that decline coming since the election. <u+201c>tech has really been running the market; now other areas are getting their day in the sun,<u+201d> said diane jaffee, senior portfolio manager at tcw group inc. mr. trump has advocated for tighter limits on trade and immigration, which could spell changes for an industry that gets much of its revenue from overseas and prizes highly skilled immigrants. bank shares continued to surge as many investors expect interest rates to rise, which should help lenders<u+2019> profits by widening the gap between what they pay on deposits and what they charge on loans. bank stocks also have benefited from bets that mr. trump would ease regulation . the kbw nasdaq bank index of large u.s. commercial lenders added another 3.2% monday and is up 14% since the nov. 8 election. j.p. morgan chase and goldman sachs group were among the biggest gainers in the dow industrials, which edged up 21.03 points, or 0.1%, to 18868.69, for the index<u+2019>s 12th record close of 2016. the s&p 500 slipped 0.25 point, or less than 0.1%, to 2164.20, and the nasdaq composite fell 18.72 points, or 0.4%, to 5218.40. <u+201c>investors have automatically assumed that a trump administration means higher growth, higher spending and higher inflation<u+2014>all of which can be good for equity markets,<u+201d> said sean lynch, co-head of global equity strategy at wells fargo. <u+201c>but we can<u+2019>t just go automatically there,<u+201d> he added. <u+201c>there are steps that could be painful as they try to reinvigorate the country. his policies may not have the intended impact or they may be implemented in a way that<u+2019>s not as beneficial as people assume.<u+201d> as bonds slid again monday, the yield on the 10-year treasury note rose to 2.224%, from 2.118% thursday. the u.s. bond market was closed friday. yields rise when prices fall. <u+201c>this is a reflation environment,<u+201d> said sergio trigo paz, head of emerging-markets fixed income at blackrock. <u+201c>it<u+2019>s very negative for fixed income across the board.<u+201d> the prospect of higher inflation has added to expectations that the federal reserve will raise interest rates next month, strengthening the dollar. the wsj dollar index, which measures the u.s. currency against 16 others, rose 0.8%. u.s. crude-oil prices settled at their lowest close since sept. 19, as a brief boost from the u.s. election continued to give way to revived concerns about oversupply. u.s. crude for december delivery fell 0.2% to $43.32 a barrel, its third consecutive session of declines. write to daniel huang at dan.huang@wsj.com and mike bird at mike.bird@wsj.com
bank stocks surge while government bonds keep sliding - wsj
daniel huang mike bird