Dow average extends record beyond 18,000 before holiday break

NEW YORK – U.S. stocks rose, extending gains after a five-day rally in equities that sent the Dow Jones Industrial Average above 18,000 for the first time.

The Standard & Poor’s 500 Index rose 0.2 percent to 2,085.30 at 10:31 a.m. in New York. The Dow added 42.61 points, or 0.2 percent, to 18,066.78. The Russell 2000 Index gained 0.4 percent to within 1 point of a record.

Trading in S&P 500 companies was 36 percent below the 30- day average for this time of day. U.S. equity markets will close at 1 p.m. for Christmas Eve, and will be shut tomorrow for the holiday.

“The computers are trading now after a spectacular week of GDP news for markets,” said Daniel Weston, chief investment officer at Aimed Capital GmbH in Munich. “This week has seen the Dow go above 18,000, which is above and beyond the expectations of most in the face of the geopolitical turmoil we have faced this year.”

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Stocks took off last week after the Federal Reserve said it will be patient on the timing of an interest-rate increase. Markets rallied to records yesterday after data showed the world’s largest economy expanded at the fastest pace in more than a decade.

U.S. equities had to overcome upheavals in 2014 that threatened to derail a bull market in its sixth year, ranging from violence in the Ukraine to an Ebola outbreak and a bear market in oil prices. Those obstacles were no match against the Fed and the economy. The Dow’s worst retreat was only 7 percent, and the gauge recovered from each decline in about two months.

Jobless claims

Fewer Americans than forecast filed applications for unemployment benefits last week, a sign the U.S. job market is making progress as the year ends. Jobless claims dropped by 9,000 to 280,000 in the week ended Dec. 20, the fewest since early November, from 289,000 in the prior period, a Labor Department report showed today.

Last month, American employers hired more people than at any time in almost three years and the breadth of industries adding jobs was the broadest since 1998.

The Dow has risen about 175 percent during the bull market that began in March 2009, propelled by better-than-estimated corporate results and three rounds of Fed bond purchases. The S&P 500 has more than tripled in that time.

Both equity gauges closed at all-time highs yesterday after the biggest five-day rally since 2011. The S&P 500 is up 0.9 percent in December, and has climbed 13 percent for the year.

ETF trading

Traders have added the most money on record to a popular exchange-traded fund tracking the S&P 500 since the Federal Reserve released its policy decision last week. The SPDR S&P 500 ETF Trust has absorbed more than $25 billion from Dec. 17 to Dec. 23, the biggest five-day inflows in data going back to 2000.

“It’s pretty remarkable to see what the market’s done the last few days,” Tobias Levkovich, Citigroup Inc.’s chief U.S. equity strategist in New York, said in an interview on Bloomberg Radio’s “Surveillance” with Tom Keene and Pimm Fox. “Some of it is the illiquidity environment of this time of year, and some of it relates to the path of last resistance being up at this point.”

Seven out of 10 major industries in the S&P 500 climbed today, with utilities and health-care companies gaining more than 1 percent. The Nasdaq Biotechnology Index rebounded 2.2 percent after retreating 6.9 percent over two days, the most since April. Energy shares had the biggest decline, losing 1.5 percent as oil prices tumbled.

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