By Akane Otani and Riva Gold
The Dow Jones Industrial Average rose at the end of a month that included several records and its first close above 19000 on the heels of the U.S. presidential election.
It is a turnaround from the beginning of the month, when stocks limped into November on losing streaks as election jitters led investors to sell risky assets and buy ones they perceived as being safer, like U.S. government bonds and gold. The blue-chip index fell for seven straight sessions through Nov. 4, while the S&P 500 fell nine days in a row -- its longest stretch of losses since 1980.
President-elect Donald Trump's surprise win Nov. 8 triggered a sharp initial selloff in stock futures, but shares have rallied since. Investors plowed into shares of banks, industrials and small companies, and sold bonds and their stock-market proxies -- dividend-paying shares like utilities -- partly on bets that Mr. Trump would loosen regulation and ramp up fiscal spending.
A string of economic reports in November showing the housing market improving, consumer prices picking up, and jobless claims falling have added to investors' expectations of higher growth and inflation.
Bets on the "reflation trade" have been a boon to the blue-chip index, which is on track to have its best month since March largely because of gains in financial and industrial shares. The Dow industrials are up nearly 6% so far in November. GoldmanSachs Group, J.P. Morgan Chase and Caterpillar were the top performers in percentage terms as of Tuesday's close.
The Dow Jones Transportation Average, often seen as a proxy for economic health because it includes companies that move goods powering manufacturing and construction, was up 11% this month through Tuesday -- its biggest monthly gain since October 2011. The Russell 2000 of small-caps was also headed for its best month since then.
Many analysts and investors, citing generally upbeat economic reports, see stocks climbing further yet.
"There's still a runway for upside given you still have a lot of positive things going on -- you have home prices increasing, consumer net worth increasing dramatically, low unemployment and signs of wage growth," said Lowell Yura, portfolio manager at BMO Global Asset Management.
Yet others, who say that uncertainty remains around Mr. Trump's administration and policy stances, caution that the market's rally may be premature.
"We don't have these policies in place yet -- it's more of a gambler's market," said Bret Chesney, senior portfolio manager at Alpine Global.
On Wednesday, the Dow Jones Industrial Average gained 84 points, or 0.4%, to 19206. The S&P 500 added 0.1%, on track for a nearly 4% monthly gain, and the Nasdaq Composite slipped 0.6%, but was on track for a 3% monthly gain.
U.S. crude oil rocketed 8% to $48.91 barrel after OPEC representatives reached a deal to cut oil production, according to people familiar with the matter. The S&P 500 energy sector jumped 4.9%, with Devon Energy, Marathon Oil and Transocean gaining more than 10% each.
Oil prices have whipsawed in recent sessions on questions about whether the Organization of the Petroleum Exporting Countries would come to an agreement to curb output amid a global glut of supply.
Investors dumped government bonds as rising oilprices -- which boost inflation expectations -- and upbeat economic data made long-term debt less attractive to hold.
The yield on the 10-year U.S. Treasury rose to 2.392% from 2.305% on Tuesday, according to Tradeweb.
Federal Reserve Gov. Jerome Powell said Tuesday that the case for raising rates had strengthened, with the economy "growing at a healthy pace, with solid payroll job gains, and inflation gradually moving up to 2%."
The Fed is widely expected to raise interest rates at its December meeting and in 2017.
Those expectations have also lifted the dollar, which was recently up 1.8% against the yen.
Elsewhere, the Stoxx Europe 600 rose 0.3% Wednesday and 0.9% for the month, underperforming their developed-market peers amid continuing jitters about the political climate.
Markets in Asia were mixed. Japan's Nikkei Stock Average was flat but ended the month over 5% higher than it started, bolstered by a steady strengthening of the dollar against the yen.
Write to Akane Otani at firstname.lastname@example.org and Riva Gold at email@example.com
(END) Dow Jones Newswires
November 30, 2016 12:34 ET (17:34 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.