Stocks climb, pushing the Dow and S&P to all-time highs

The stock market reached another milestone Tuesday as the Dow Jones industrial average closed at a record high.

A day earlier, the broader Standard & Poor’s 500, a widely used benchmark for index funds, also reached a record-high close. Both indexes beat peaks set in May 2015.

The Dow, which is made up of just 30 stocks, is an older and better-known barometer of the market than the S&P 500, but professional investors generally pay much closer attention to the S&P 500.

The Dow rose 120.74 points, or 0.7%, to 18,347.67. That is 35 points higher than its previous closing high set May 19 last year.

The S&P 500 climbed 14.98 points, or 0.7%, to 2,152.14. The Nasdaq composite went up 34.18 points, or 0.7%, to 5,022.82.

The Nasdaq is still lagging behind the other two main U.S. stock market indexes. The index, which is heavily weighted with technology and biotech stocks, erased its losses for the year Tuesday.

The Dow and S&P 500 are each up 5.3% for 2016, having roared back after a big drop in January and early February. The S&P 500 has soared 17.7% since reaching a low of the year of 1,829 on Feb. 11.

Investors continued to show an appetite for risk. The biggest gainers included energy companies, which have been benefiting from a recovery in the price of oil, materials companies and banks.

Financial companies, which have lagged behind the overall market this year, have been rising in recent days as long-term interest rates move higher in the bond market. Higher rates mean banks can make more money from lending. Citigroup shares rose 2.7% to $43.44.

Despite recent increases, however, bond yields remain near historic lows, a worrisome sign to many analysts. Last week the yield on the 10-year Treasury note touched an all-time low. Bond yields tend to fall when demand for bonds rises, which can indicate that investors are seeking safety.

“I wish we can be celebrating, but it’s a little disconcerting,� said Rob Bartenstein, chief executive of Kestra Private Wealth Services. “You’ve got government bonds at historical lows and equity markets at historical highs. That’s not something you see at the same time. I feel underinvested, but I’m not willing to chase stocks.�

Sectors that investors tend to favor when they’re nervous, including utilities, phone companies and makers of consumer staples, all fell as investors moved money out of lower-risk assets. Bond prices also fell sharply, sending yields higher.

Aluminum maker Alcoa kicked off the second-quarter earnings season on a positive note by reporting revenue and profit that beat Wall Street expectations. The stock jumped 5.4% to $10.69. Earnings for companies in the S&P 500 are expected to fall compared with the year-earlier quarter but then rise in the next quarter.

Seagate Technology surged 21.8% to $29.35 after forecasting strong sales and announcing it will cut 6,500 jobs, about 14% of its workforce.

Benchmark U.S. crude advanced $2.04 to reach $46.80 a barrel. Brent crude, a standard for international oil prices, rose $2.22 to reach $48.47 a barrel. In other energy trading in New York, wholesale gasoline rose 5 cents to $1.43 a gallon, heating oil rose 5 cents to $1.46 a gallon and natural gas rose 3 cents to $2.73 per 1,000 cubic feet.

In Japan, the Nikkei 225 index jumped 2.5%, adding to its 4% gain from the day before. Prime Minister Shinzo Abe has promised new government spending to help jolt Asia’s second-biggest economy back to life now that his Liberal Democratic Party has won in parliamentary elections. Investors are betting he’ll keep flooding the market with money by expanding bond purchases.

Elsewhere in Asia, Korea’s Kospi edged up 0.1% and Hong Kong’s Hang Seng advanced 1.7%. In Europe, France’s CAC 40 rose 1.6% and Germany’s DAX added 1.3%. Britain’s FTSE 100 was flat.

Shares of Nintendo jumped 12.7% in Tokyo, fueled by the craze for “Pokemon Go,� a smartphone game that’s become the top-grossing app in the iPhone store less than a week after its release in the U.S., Australia and New Zealand.

U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 1.50% from 1.43%. Last week the yield plunged as low as 1.32%, an all-time low, according to Tradeweb.

The dollar rose to 104.79 yen from 102.77 yen. The euro rose to $1.1067 from $1.1058.

The price of gold fell $21.30 to $1,335.30, silver fell 13 cents to $20.17 an ounce and copper rose 7 cents to $2.21 a pound.

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UPDATES:

2:29 p.m.: This article was updated with additional information.

1:37 p.m.: This article was updated with closing prices.

7:57 a.m.: This article was updated with more recent prices and additional information.

This article was originally published at 7:10 a.m.