Stocks were higher in afternoon trading Monday, as weakness in technology companies was more than offset by strength in banks and other sectors. Investors continued to closely watch the bond market, where another tick up in bond yields was giving some investors pause.
The S&P 500 index was up 0.5% as of 12:02 p.m. Eastern. Bank stocks helped lift the Dow Jones Industrial Average 460 points, or 1.5%, to 31,956. The technology-heavy Nasdaq composite fell 0.7%.
Financial stocks were among the best performers. Wells Fargo, JPMorgan Chase and Citigroup were up 2% or more.
Tech stocks, which have been negatively impacted by the rise in bond yields, were mostly lower. Apple fell 3.2% and Facebook was down 1.2%.
Trading has been choppy in recent weeks as investors fret over a sudden spike in long-term interest rates in the bond market. The S&P 500 is coming off its first weekly gain in three weeks.
“Interest rates reflect a real economic recovery and they’re not going back down anytime soon,” said Brad McMillan, chief investment officer for Commonwealth Financial Network. “Right now, the market is struggling with that.”
Bond yields were moving higher again, and the yield on the 10-year Treasury note rose to 1.60%. Investors have been betting that trillions of dollars in coming government stimulus will help lift the economy out of its coronavirus-induced malaise. There are also investors who are betting that stimulus and an improving economy will result in some amount of inflation down the road.
The U.S. economic aid package, passed narrowly by the Senate on Saturday, provides direct payments of up to $1,400 for most Americans and extends emergency unemployment benefits. It’s a victory for President Joe Biden and his Democratic allies, and final congressional approval is expected this week.
“That eliminates a major short-term risk and also puts a lot of money into the economy in the short term,” McMillan said.
Rising oil prices are a part of that picture. After plunging with the onset of the pandemic, as demand plummeted, prices have been recovering in the past few months.
Last week, with oil prices rising, some observers were expecting the OPEC cartel and its allies to lift more restrictions and let the oil flow more freely. But OPEC agreed to leave most restrictions in place, despite growing demand.
Benchmark US crude fell 1.4% to $65.18 a barrel.
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