U.S. equities and stock exchange traded funds continued to hit new records as market optimism and strong retail earnings help support the momentum.
The S&P 500 Index, along with related funds including the SPDR S&P 500 ETF (NYSEArca: SPY), iShares Core S&P 500 ETF (NYSEArca: IVV) and Vanguard 500 Index (NYSEArca: VOO), were 0.4% higher Monday.
U.S. stocks have been pushing toward new records since last week after President Donald Trump promised tax reforms to help support the economy.
“There is no doubt in anyone’s mind that the market has become over extended and is due for a pullback,” Quincy Krosby, market strategist at Prudential Financial, told Reuters. “That said, when you have this kind of momentum, it is very hard to sit on the sidelines.”
Further fueling gains, strong earnings have kept the markets going. S&P 500 companies are expected to have generated overall profit gains of 7.5% in the last quarter – their largest rise since the fourth quarter of 2014.
On Monday, retailers were rallying after Wal-Mart (NYSE: WMT) reported higher-than-expected U.S. sales and department store bellwether Macy’s (NYSE: M) posted profits that topped estimates, with the SPDR S&P Retail ETF (NYSEArca: XRT), the largest dedicated retail exchange traded fund, up 0.8%.
The energy sector was also among the leaders Monday, with the Energy Select Sector SPDR (NYSEArca: XLE), the largest equity-based energy exchange traded fund, 0.9% higher after the Organization of Petroleum Exporting Countries said it was adhering to its agreed production cuts, lifting crude oil prices.
“All countries involved remain resolute in the determination to achieve a higher level of conformity,” OPEC Secretary General Mohammad Barkindo said in a conference, according to Reuters.
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