Dow posts closing record high for 2nd day, boosted by banks

The Dow Jones Industrial Average reached a record closing high on Tuesday for a second straight day as financial and industrial shares rallied, while the Nasdaq fell.

The S&P 500 ended slightly weaker after hitting an intraday all-time high. Declines in shares of big growth names including Tesla Inc weighed on the index and the Nasdaq Composite, which ended down more than 1%.

Economically sensitive energy, financials and industrials were the leading sectors in the S&P 500, with financials eking out an all-time closing high.

Helping sentiment, the World Health Organization cited increasing evidence that the coronavirus variant caused milder symptoms than previous variants.

Earlier, U.S. manufacturing data for December showed some cooling in demand for goods, but investors took solace in signs of supply constraints easing.

The S&P 500 bank index rose 3.5% in its biggest daily percentage gain in about a year.

Some strategists said financials and other value-oriented stocks could be near-term market leaders as investors gear up for interest rate hikes from the Federal Reserve by mid-year to curb high inflation. U.S. Treasury yields gained for a second trading day.

Investors are “going to punish growth stocks with high valuations,” said Robert Phipps, a director at Per Stirling Capital Management in Austin, Texas.

“This is a time when defensive stocks and value stocks are likely to outperform.”

The S&P 500 value index jumped 1%, while the S&P 500 growth index fell 1%.

The Dow Jones Industrial Average rose 214.59 points, or 0.59%, to 36,799.65; the S&P 500 lost 3.02 points, or 0.06%, at 4,793.54; and the Nasdaq Composite dropped 210.08 points, or 1.33%, to 15,622.72.