Image source: Getty Images.
Stocks bumped around near break-even for the entire trading session on Monday, with the Dow Jones Industrial Average (^DJI +1.79%) gaining slightly to reach another all-time high as the S&P 500 (^GSPC +1.20%) index ended essentially flat.
Today's stock market:
|
Index |
Percentage change |
Point change |
|---|---|---|
|
Dow |
0.11% |
21.03 |
|
S&P 500 |
(0.01%) |
(0.25) |
Data source: Yahoo Finance.
Continuing the post-election surge, banks were the biggest winners on Wall Street. The Financial Sector Select SPDR Fund (XLF +0.77%) gained 2% to break back into positive territory on the year. Meanwhile, a slight rebound in the price of gold helped the highly leveraged Direxion Daily Gold Miners Bull 3X ETF (NUGT +5.62%) rise by 3%.
As for individual stocks, Bank of America (BAC +0.75%) and Harman International (HAR +0.00%) both enjoyed market-thumping gains to start off the trading week.
Bank of America's new high
Bank of America surged 6% to a new high as investors continue to bet that a Trump administration will be good for the nation's biggest banks. The stock is now up 17% in the four trading days since Donald Trump captured the White House.
Economic forecasts are ticking higher in response to the belief that the new administration will prioritize major stimulus spending through infrastructure projects and tax cuts. Economists polled by The Wall Street Journal over the weekend, for example, said the economy could growth by 2.2% next year and by 2.3% in 2018, compared to their prior 1.5% projections. A faster-growing economy would theoretically spark increased loan demand and push Bank of America's profits up .
While any spending project or tax cut plan is completely hypothetical at this point, there's no denying that interest rates are moving in Bank of America's favor. For every full percentage point increase on long term interest rates, Bank of America's management estimates that the company will earn over $5 billion in additional interest income .
Harman International's buyout
Harman International, which designs entertainment technology for automobiles, jumped 25% after agreeing to be purchased by Samsung (NASDAQOTH: SSNLF). The deal valued Harman at $112 per share, or $8 billion, and now gives Samsung a strong presence in this growing niche. "Harman perfectly complements Samsung in terms of technologies, products, and solutions," Samsung CEO Oh-Hyun Kwon said in a press release .
Image source: Getty Images.
Harman's management team believes the buyout represents the best way for shareholders to cash in on the deep expertise that the company has built around in-car navigation systems, audio systems, and wireless connectivity. "Today's announcement is a testament to what we have achieved and the value that we have created for shareholders," CEO Dinesh Paliwal said.
Samsung hopes it can use its expertise in connected mobility and displays, along with its global distribution platform, to extend Harman's market leading position. The company also thinks it can make significant improvements to the user experience in car infotainment systems that will find healthy demand from Harman's automotive partners.
Assuming the deal progresses as planned, shareholders can expect to receive their $112 per share in cash when the deal closes sometime in the middle of next year.
