By Sue Chang, MarketWatch , Ryan Vlastelica
Dollar surges, bond rout continues on heels of Trump win
The Dow Jones Industrial Average edged up to a record-high close on Monday even as the broader stock market came under pressure, with investors seeking more clarity on the policy proposals of President-elect Donald Trump's administration.
The Dow Jones Industrial Average rose 21.03 points, or 0.1%, to finish at 18,868.69, its third straight record close. The blue-chip index had also touched a historic high of 18,934.05 during the session.
The S&P 500 index fell 0.25 points to end at 2,164.20, and the Nasdaq Composite dropped 18.72 points, or 0.4%, to close at 5,218.40. The weakness in the tech-heavy Nasdaq was another trend that carried over from last week, when technology stocks sold off sharply (http://www.marketwatch.com/story/tech-stocks-suffocated-by-uncertainty-2016-11-09).
"It makes sense that stocks took a breather today, as they wait for more concrete plans from the Trump administration," said Kristina Hooper, U.S. investment strategist for Allianz Global Investors. "We saw a big run-up last week on expectations of what a Trump administration might do for the economy -- but those are only expectations and Mr. Trump is more than two months away from assuming office."
Read:Trump rally to be followed by 11% stock-market tumble, forecasts Tom DeMark (http://www.marketwatch.com/story/in-wake-of-trump-rally-tom-demark-calls-for-11-stock-market-decline-2016-11-11)
Investors are also taking advantage of the surge in stock prices to pocket profits, contributing to the market's failure to move decisively higher, said Andrew Adams, a strategist at Raymond James.
Major indexes surged since the election, with the Dow recording its biggest weekly gain since 2011. The S&P 500 saw its largest weekly advance since 2014 on a belief that Trump's economic proposals will lead to accelerated economic growth. Analysts at Morgan Stanley believe the policies that have the best chance of implementation are comprehensive tax reform, infrastructure spending and trade protectionism. However, investors are taking note that there are few specific details about Trump's policies as of yet.
"There are a lot of people who are waiting to see the actualities of his proposals, because right now we only have the broad-brush outlines," said Mark Grant, chief fixed income strategist at Hilltop Securities, who added that he nonetheless expected the new administration's policiesto help stock prices. "I'm very bullish about the equity market right now," he said.
Read:Trump is turbocharging the stock market's V-shaped surge (http://www.marketwatch.com/story/trump-is-turbocharging-the-stock-markets-v-shaped-surge-2016-11-12)
Meanwhile, Adams expects the market's retreat will be muted, with buying reviving once the S&P 500 nears 2,150.
Apart from the three major indexes, a number of other market benchmarks advanced. The Russell 2000 index closed up 1.2% and the S&P Small Cap 600 Index , climbed 1.4%.
Need to know:Why investors could come to regret last week's appetite for stocks (http://www.marketwatch.com/story/why-investors-could-come-to-regret-last-weeks-appetite-for-stocks-2016-11-14)
The Stoxx Europe 600 index was up just 0.3%, after opening up 0.8%. Asian stocks had a mixed day (http://www.marketwatch.com/story/nikkei-surges-leaving-other-asian-markets-in-the-dust-2016-11-13), with Hong Kong's HangSeng Index dropping 1.4%, while the Nikkei 225 index rose 1.7% on a weak yen.
Gold settled down 0.2% while oil prices recovered to rise 0.6%.
The yield on the U.S. 10-year Treasury bond traded as high as 2.36%, the highest since November, according to FactSet. The 30-year bond yield also moved above 3% earlier, the highest since January.
Read:U.S. Treasury yields surge, add to Trump-fueled climb (http://www.marketwatch.com/story/us-treasury-yields-surge-add-to-trump-fueled-climb-2016-11-14)
Bonds have been suffering on the view that while Trump's policies could be good for growth, they could also be inflationary, meaning the Federal Reserve may be forced to raise interest rates faster than markets expected. Mutual and exchange-traded funds benchmarked to the Bloomberg Barclays Aggregate U.S. Bond Index lost about $18 billion in value last week (http://www.marketwatch.com/story/bond-funds-lost-18-billion-in-value-during-this-weeks-trump-inspired-selloff-2016-11-11).
Read:With Trump win comes expectations for interest rates to rise 'bigly' (http://www.marketwatch.com/story/with-trump-win-comes-expectations-for-rates-to-rise-bigly-2016-11-11)
The dollar (http://www.marketwatch.com/story/dollar-hits-multi-month-highs-versus-euro-yen-loonie-2016-11-14) was continuing last week's strong performance, hitting multimonth highs against the euro, yen and Canadian dollar on Monday. The ICE Dollar index , which measures the dollar's strength against six of its biggest rivals, rose to 100.04 from 99.055 late Friday, trading at the highest level in about a year, according to FactSet.
Economic docket: There was no major economic data on Monday's calendar, but there is a lineup of Fed speakers.
Fed Chairwoman Janet Yellen this week (http://www.marketwatch.com/story/yellen-to-testify-next-week-on-economic-outlook-before-congress-2016-11-10) will testify before Congress about the economic outlook, roughly a month before a Fed meeting, which many believe could deliver a U.S. interest-rate hike.
Richmond Fed President Jeffrey Lacker will appear on a panel discussion on fiscal policy and debt in Chestertown, Md., at 5 p.m. Eastern. Then San Francisco Fed President John Williams will speak on growing China trade and investment in San Francisco at 6:30 p.m. Eastern.
Stocks to watch:Siemens AG(SIE.XE) said it has agreed to buy U.S.-based Mentor Graphics Corp.(MENT) in a merger deal worth $4.5 billion (http://www.marketwatch.com/story/siemens-agrees-to-buy-us-based-mentor-in-45-billion-deal-2016-11-14). Shares of Mentor rose nearly 18%.
Samsung Electronics Co.(005930.SE) said it would buy U.S. auto-parts supplier Harman International Industries Inc.(HAR) for $8 billion in an all-cash deal (http://www.marketwatch.com/story/samsung-to-buy-car-audio-maker-harman-for-8-bln-2016-11-14). (http://www.marketwatch.com/story/samsung-to-buy-car-audio-maker-harman-for-8-bln-2016-11-14) Harman shares soared 25%.
--Barbara Kollmeyer contributed to this article.
(END) Dow Jones Newswires
November 14, 2016 16:28 ET (21:28 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.