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Associated Press
Trader Michael Zicchinolfi, foreground left, and specialist Anthony Rinaldi, right, work on the floor of the New York Stock Exchange. Wall Street re-entered record territory Monday as the Dow Jones industrial average closed at 16,695.47.

Dow bangs out new record high

– The stock market returned to record levels Monday as investors regained their appetite for riskier stocks.

After beating down Internet and small companies for two months, investors decided that those stocks had fallen enough. Among the big gainers were Twitter and Facebook, which had plunged in March and April. The Russell 2000, an index made up of small companies, climbed the most in two months.

Investors have been more cautious this year than last. They’ve favored big, less volatile stocks that pay rich dividends because of concerns about the outlook for the economy. Utility and energy companies have been among the beneficiaries of this trend, and have outperformed the overall market in 2014.

While interest rates remain low, investors will likely keep getting drawn back into stocks after any sell-off because holding cash isn’t generating any returns, said Tim Courtney, chief investment officer at Exencial, an independent wealth management company.

“There is some bargain buying in some of the names that got hit hard in March and April,” Courtney said.

The Standard & Poor’s 500 index rose 18.17 points, or 1 percent, Monday to finish at an all-time high of 1,896.65. The index last closed at a record high April 2, when it reached 1,890.90.

The Dow Jones industrial average gained 112.13 points, or 0.7 percent, to end at 16,695.47 Monday.

The Dow’s previous record high was 16,583.34 on Friday.

The Nasdaq climbed 71.99 points, or 1.8 percent, to 4,143.86.

The Russell 2000 index rose 26.4 points, or 2.4 percent, to 1,133.65, its biggest gain since March 4. The index had slumped almost 10 percent from March 4 to May 9 as investors sold riskier stocks.

The index still remains down 2.6 percent for the year after surging 37 percent in 2013.

Facebook rose $2.59, or 4.5 percent, to $59.83, reducing the stock’s decline since March 10 to 17 percent. Twitter, another stock that has been beaten down recently, rose $1.89, or 5.9 percent, to $33.94.

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