H&R Block, which is set to deliver its tax season update on Thursday, cranked out a nearly 3 percent gain on Monday. It had plenty of company among regional stocks.
Other percentage gainers included Kansas City Southern, up nearly 2 percent, DST, up 1.5 percent, Great Plains Energy, up 1.3 percent, and O’Reilly Automotive, up nearly 1 percent.
The small number of lowers included YRC, down 0.2 percent, Waddell & Reed, down 0.2 percent, and Layne Christensen, down 0.2 percent.
Overall, investors brushed off early jitters about a potential slowdown in China and pushed the Dow to its highest close of the year.
The Dow Jones industrial average rose 38.16 points, or 0.3 percent, to 14,127.82. The index is a fraction of a percentage point away from its record close of 14,164, reached on Oct. 9, 2007.
Stocks dropped at the opening bell and stayed lower most of the morning amid concern that new steps introduced by the Chinese government to cool the booming housing market in the world’s second-largest economy.
Chinese markets were dragged down by housing stocks, which fell sharply after the country’s cabinet ordered new measures to rein in home prices. China will raise minimum down payments in areas where prices are deemed to be rising too fast and crack down on efforts to evade limits on how many properties each buyer can acquire.
“The U.S. market continues to digest the negative news and hang tough,” said Ryan Detrick, a senior strategist at Schaeffer’s Investment Research.
The stock market has rallied this year on optimism that the U.S. housing market is recovering and signs that companies are hiring more. Strong corporate earnings and continuing economic stimulus from the Federal Reserve have also boosted stock prices.
Despite having already logged strong gains this year, stocks may still be able to maintain their momentum as investors move money out of bonds, Rob Lutts, chief investment officer at Cabot Money Management, said.
“It’s all about where the money is going,” Lutts said. “If the money that is sitting on the sideline, or in bonds, is moving into equities that alone is enough to create that shift.”
Investors put $2.8 billion into U.S. stock mutual funds in the week ending Feb. 27, according to Lipper. That’s the eighth straight week investors have put more money into stocks, the longest streak of inflows in almost two years.
The Dow has risen 7.8 percent so far this year and the S&P 500 index is 6.9 percent higher, while the yield on the 10-year Treasury note remains below 2 percent. The yield, which moves inversely to its price, rose 3 basis points to 1.87 percent Monday.
For now, stocks are likely to grind higher as investors who missed the rally at the start of the year buy stocks on any drops in the market, Scott Wren, a senior equity strategist at Wells Fargo Advisors, said.
“I’d love to see a pullback, because pullbacks are opportunities,” Wren said.
Janet Yellen, vice chair of the Federal Reserve, said Monday she does not see risks at the moment from the U.S. central bank’s low-interest rate policies. The Fed is buying $85 billion each month in Treasury and mortgage-backed securities to keep long-term interest rates very low.
Investors’ enthusiasm is being held in check by the automatic government budget cuts that took effect Friday after President Barack Obama and Congress failed to reach a budget deal. Economists expect the cuts to hurt U.S. economic growth. Both Republicans and Democrats pledged to retroactively undo the cuts, but they have given no indication of how that process would take shape.
In other trading, the Standard & Poor’s 500 rose 7 points, or 0.5 percent, to 1,525.20. The Nasdaq composite gained 12.29 points, or 0.4 percent, to 3,182.03.
The BATS 1000 rose 75.76 points, or 0.44 percent, to close at 17,215.60.
Capitol Federal Financial fell 1 cents, or 0.08%, to close at $11.90.
Cerner Corp. rose 37 cents, or 0.41%, to close at $89.60.
Commerce Bancshares Inc. fell 24 cents, or 0.63%, to close at $37.74.
Compass Minerals rose 75 cents, or 1.02%, to close at $74.25.
DST Systems Inc. rose $1.00, or 1.47%, to close at $68.87.
Ferrellgas Partners L.P. rose 32 cents, or 1.53%, to close at $21.20.
Garmin Ltd. rose 27 cents, or 0.77%, to close at $35.41.
Great Plains Energy rose 29 cents, or 1.32%, to close at $22.28.
H&R Block Inc. rose 66 cents, or 2.66%, to close at $25.44.
Inergy L.P. rose 35 cents, or 1.74%, to close at $20.41.
Kansas City Life Insurance Co. rose 14 cents, or 0.38%, to close at $37.34.
Kansas City Southern rose $1.87, or 1.83%, to close at $103.89.
Layne Christensen Co. fell 4 cents, or 0.18%, to close at $21.76.
O’Reilly Automotive Inc. rose 99 cents, or 0.96%, to close at $103.61.
Sprint Nextel Corp. rose 3 cents, or 0.52%, to close at $5.83.
UMB Financial Corp. rose 7 cents, or 0.15%, to close at $45.68.
Waddell & Reed Financial Corp. fell 9 cents, or 0.22%, to close at $40.78.
YRC Worldwide Inc. fell 1 cents, or 0.16%, to close at $6.07.