By Riva Gold
U.S. stocks, government bond yields and the dollar climbed Friday ahead of President-elect Donald Trump's inauguration.
The Dow Jones Industrial Average rose 96 points, or 0.5%, to 19828 in recent trading, while the S&P 500 and Nasdaq Composite gained 0.6%.
Since the November election, investors have broadly bought the dollar and U.S. stocks and sold long-dated government bonds on expectations for tax cuts, spending increases and rolled-back regulation.
In the trading sessions leading up to Mr. Trump's inauguration, however, some popular trades have waned.
The Dow industrials on Thursday erased its gains this year in its fifth consecutive session of losses. Part of the reason for the reversal: a pullback in big bank stocks.
Financials, the best-performing S&P 500 sector from Election Day to year-end, lost ground in the past week as investors pulled money out of the sector. The group is down 2.1% so far this week and is now down 1.1% in 2017 through Thursday's close.
Financial sector funds snapped a 16-week streak of inflows and industrial sector funds posted their biggest outflow since 2015, according to fund-tracker EPFR Global, reversing popular trends that followed the November election. Flows into gold funds hit a 10-week high.
The 10-year U.S. Treasury yield rose Friday to 2.495% from 2.461% Thursday, when expectations for higher U.S. rates after a speech by Federal Reserve Chairwoman Janet Yellen sent it to its biggest daily jump of the year. Yields move inverselyto prices.
The WSJ Dollar Index was last up 0.1%.
Mr. Trump is scheduled to deliver an inaugural address later Friday as he is sworn in as the 45th U.S. president. Some investors are hoping clarity from Mr. Trump on the new administration's policy priorities will help reignite a stalled postelection rally.
"We've got many generalities and not many specifics as far as policies," said Jon Adams, investment strategist at BMO Global Asset Management.
New details or a timeline on taxation and infrastructure spending plans would be supportive of a further move higher for stocks, he said, while possible changes to immigration and trade policy changes pose risks to the market.
On Friday, the Dow resumed its climb, lifted in part by shares of Procter & Gamble, which rose 2.6% after reporting a smaller-than-expected fall in sales.
In other corporate news, American Express fell 1% after posting lower fourth-quarter results. General Electric declined 2% after the industrial giant's revenue fell more than expected.
Elsewhere, the Stoxx Europe 600 swung between small gains and losses, as a steep climb in government bond yields lifted bank shares but weighed on steady dividend-payers. Advances in the financial sector were offset by a decline in real-estate and health-care shares, leaving the pan-European index flat in afternoon trading.
"If rates move up, financials are really the only sector where you get traction and support for earnings growth," said Mr. Foliot.
In a speech Thursday, Ms. Yellen signaled a gradual course for interest-rate rises, noting she doesn't see the U.S. economy at risk of overheating and doesn't expect growth to pick up much soon. Ms. Yellen had said Wednesday that rates could be raised "a few times a year" through 2019.
Separately, Mr. Trump's pick for Treasury secretary, Steven Mnuchin reaffirmed the strength of the dollar Thursday following comments from Mr. Trump earlier in the week that it was "too strong."
In commodities, U.S.-traded crude oil rose 2.4% to $53.37 a barrel amid signs of waning OPEC production.
Corrie Driebusch contributed to this article.
Write to Riva Gold at firstname.lastname@example.org
(END) Dow Jones Newswires
January 20, 2017 10:14 ET (15:14 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.