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Tech giants surge again, lifting stocks to record highs

Apple and other big-name technology stocks got back to their winning ways Monday and helped drive U.S. indexes once again to record heights.

The Standard & Poor's 500 index rose 20.31 points, or 0.8%, to 2,453.46 and surpassed its old record, set nearly a week ago, by half a percent. The Dow Jones industrial average advanced 144.71 points, or 0.7%, to 21,528.99, and the Nasdaq composite jumped 87.25, or 1.4%, to 6,239.01.

Tech heavyweights — which were among the stock market's biggest stars until a recent drop — led the way. After being up more than 20% for the year, tech stocks in the S&P 500 fell sharply two Fridays ago on worries that they had risen too much, too quickly. In a little more than a week, tech stocks lost about a fifth of their year-to-date gains.

On Monday, Apple jumped 2.9% to $146.34 for its second-best day of the year. Google's parent, Alphabet, rose 1.7% to $975.22. Altogether, tech stocks in the S&P 500 rose 1.7%, the largest gain among the 11 sectors that make up the index.

It's just the latest example of investors steeling themselves and “buying the dip.” Every time the stock market has shown any weakness in the last eight years, it has proved to be a good time for investors to buy. That's because stocks have ended up erasing any losses incurred and moving higher. That track record has trained investors to pounce whenever they see a drop, and analysts have noticed how ingrained the instinct has become.

“It's concerning, but I don't see what breaks it at this point,” said Nate Thooft, senior portfolio manager at Manulife Asset Management. “It's going to be really, really hard to predict what that circumstance is. For the time being, investors are thinking, ‘We can't afford not to be in this market, and we'll continue to play along with the dynamics of the gradual melt-up.’ ”

Thooft expects stocks to continue rising, even with prices high, because bonds look less attractive. Furthermore, profit growth is improving for companies, which helps to justify their stock price gains.

The biggest gainer in the S&P 500 on Monday was PerkinElmer, which sells testing equipment and scientific instruments. It jumped 6.5% to $67.73 after it agreed to buy Euroimmun Medical Laboratory Diagnostics of Germany for $1.3 billion in cash.

On the other end was energy company EQT, which sank 9% to $53.51, the biggest drop in the index, after agreeing to buy Rice Energy for $6.7 billion in cash and stock in a deal that EQT said will make it the country's largest producer of natural gas. Rice surged 24.8% to $24.57.

Valeant Pharmaceuticals International jumped 6.4% to $13.47 after the beleaguered drugmaker said hedge-fund manager John Paulson, its largest shareholder, will join its board.

Hain Celestial Group fell 2% to $33.24 after the Wall Street Journal reported that the organic food company, which hasn't released financial results for more than a year, risks being delisted from the Nasdaq.

In overseas markets, European shares rose after French voters gave their new president a political majority in the parliament. The vote “will lend him enough support to rapidly implement his pro-business reform program,” said Marion Amiot, senior economist at Oxford Economics. She raised her forecast for French economic growth for 2018 to 1.7% from 1.6%.

The French CAC 40 gained 0.9%, and Germany's DAX rose 1.1%. The FTSE 100 in London rose 0.8% as Britain opened negotiations to withdraw from the European Union.

In Asia, Japan's Nikkei 225 climbed 0.6%, the Hang Seng in Hong Kong jumped 1.2% and South Korea's Kospi gained 0.4%.

Bond prices fell, which sent yields higher. The yield on the 10-year Treasury rose to 2.18% from 2.15%. The two-year yield climbed to 1.35% from 1.31%, and the 30-year yield ticked up to 2.79% from 2.77%.

The dollar rose to 111.54 yen from 110.84 yen. The euro fell to $1.1147 from $1.1195, and the British pound slipped to $1.2729 from $1.2780.

In the commodities markets, benchmark U.S. crude fell 54 cents to settle at $44.43 a barrel. Brent crude, the international standard, fell 46 cents to $46.91 a barrel.

Natural gas fell 14 cents to $2.89 per 1,000 cubic feet, heating oil fell 2 cents to $1.41 a gallon, and wholesale gasoline held steady at $1.45 a gallon.

Gold fell $9.80 to settle at $1,246.70 an ounce, silver fell 16 cents to $16.50 an ounce, and copper rose 3 cents to $2.59 a pound.


UPDATES:

3:10 p.m.: This article was updated with closing prices and context.

9:45 a.m.: This article was updated with market prices, context and analyst comment.

This article was originally published at 6:55 a.m.

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