The U.S. benchmark S&P 500 stock index set record intraday and closing highs on Monday as last week's strong monthly U.S. jobs report worked its way into financial markets, and European shares rose as a single candidate emerged to succeed David Cameron as British prime minister.
The S&P 500 ended at a record high of 2,137.16 after touching a record intraday high of 2,143.16. It overtook the previous highs touched in May 2015 as investors harbored greater optimism about the U.S. economy after last Friday's stronger-than-expected jobs report.
The gains in U.S. shares on Monday were broad based. Industrials and consumer staples also hit record highs. The tech-heavy Nasdaq Composite rose above 5,000 for the first time since December during the session.
The STOXX Europe 600 closed up 1.6 percent at 332.72, its highest close since Britain's vote to exit the European Union on June 23. Theresa May won the race to succeed David Cameron as Prime Minister, reducing political uncertainty in the UK.
"The markets are having a feel-good rally because the jobs report on Friday was better-than-expected and that was followed up by some good election news in Britain and Japan," said Alan Gayle, senior investment strategist at RidgeWorth Investments in Atlanta. "Investors have been looking for a reason to buy stocks and now they have it."
U.S. Treasury yields rose on Japanese Prime Minister Shinzo Abe's order for a fresh round of fiscal stimulus, which reduced demand for safe-haven U.S. bonds, and as investors braced for $56 billion in supply this week. Abe's ruling coalition clinched a victory in Sunday's election to parliament's upper house.
U.S. 30-year yields were last at 2.146 percent after hitting a record low of 2.089 percent in overnight trading. Benchmark 10-year yields were last at 1.432 percent, from a yield of 1.365 percent late Friday.
MSCI's all-country world equity index was last up 3.77 points, or 0.94 percent, at 404.76.
The Dow Jones industrial average closed up 80.19 points, or 0.44 percent, at 18,226.93. The S&P 500 ended up 7.26 points, or 0.34 percent, at 2,137.16. The Nasdaq Composite closed up 31.88 points, or 0.64 percent, at 4,988.64.
Europe's broad FTSEurofirst 300 index ended 1.5 percent higher at 1,315.49.
Benchmark Brent crude and U.S. crude prices hit two-month lows of $45.90 a barrel and $44.53 a barrel, respectively, on extended selling after the market's break below a key technical support level last week due to oversupply fears.
U.S. crude settled down 65 cents at $44.76 per barrel, while Brent crude settled 51 cents lower at $46.25 a barrel.
The dollar rose to a 10-day high against the safe-haven yen of 102.89 yen, climbing more than 2 percent, following Abe's call for more stimulus.
"It looked like part of what held the BOJ back several times earlier this year is it just didn't make sense to expand (quantitative easing) if there's no coordination with fiscal policy," said Greg Anderson, global head of foreign exchange strategy at BMO Capital Markets in New York. "But now there is."
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