Dow Breaks Through 18,000 After GDP Report

Traders work on the floor of the New York Stock Exchange in New York December 22, 2014.  REUTERS/Carlo Allegri

Traders work on the floor of the New York Stock Exchange in New York December 22, 2014. REUTERS/Carlo Allegri

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NEW YORK - U.S. stocks advanced on Tuesday, with both the Dow and S&P 500 building on a four-day rally to set new intraday records after an unexpectedly strong report on economic growth.

The gains pushed the Dow over 18,000 for the first time in its history, with the index reaching a high of 18,020.19.

The final estimate of the U.S. gross domestic product (GDP) for the third quarter was revised up to a 5 percent annual pace, its quickest in 11 years, from 3.9 percent reported last month, on stronger consumer and business spending, the government said.

The report easily topped expectations calling for a 4.3 percent pace.

"That is a solid number, that is really what you want to see, you want to see it in demand," said Jack Ablin, chief investment officer at BMO Private Bank in Chicago.

"That is a huge plus, a five handle on GDP is astounding to me, but I’m not going to turn it away - Merry Christmas."

However, durable goods orders unexpectedly fell 0.7 percent in November, well short of expectations for an increase of 2.9 percent. Non-defense capital goods orders, excluding aircraft, a closely watched proxy for business spending plans, was unchanged after a downwardly revised 1.9 percent drop in October.

Major Wall Street indexes have risen for four straight sessions, pushing the benchmark S&P index .SPX to its 50th record high of the year. The S&P has risen 5.4 percent over that period, its best 4-day run since July 2010. The rally comes on the heels of a selloff, sparked by a slump in oil prices that saw the index drop nearly 5 percent from its prior record high set on Dec. 5.

The Dow Jones industrial average .DJI rose 41.69 points, or 0.23 percent, to 18,001.13, the S&P 500 .SPX gained 5.77 points, or 0.28 percent, to 2,084.31 and the Nasdaq Composite .IXIC added 5.49 points, or 0.11 percent, to 4,786.92.

The Thomson Reuters/University of Michigan's final December reading on consumer sentiment is scheduled for release at 9:55 a.m. New home sales data for November as well as the November reading for personal income and spending are expected at 10 a.m..

Trading volume is expected to be light this week due to the Christmas holiday, which could increase volatility. U.S. equity markets will open for an abbreviated session Wednesday and be closed on Thursday.

Walgreen Co (WAG.N) advanced 1.1 percent to $75.07 after the drugstore chain operator reported a better-than-expected quarterly profit.

China Finance Online Co Ltd (JRJC.O) jumped 20.1 percent to $6.39 after the web-based financial services company posted quarterly results.

Advancing issues outnumbered decliners on the New York Stock Exchange by 1,951 to 747, for a 2.61-to-1 ratio on the upside; on the Nasdaq, 1,229 issues rose and 992 fell for a 1.24-to-1 ratio favoring advancers.

The benchmark S&P 500 index posted 79 new 52-week highs and 5 new lows; the Nasdaq Composite recorded 91 new highs and 10 new lows.

BY CHUCK MIKOLAJCZAK - Tue Dec 23, 2014 9:52am EST(Reuters)

(Editing by Chizu Nomiyama, Jeffrey Benkoe and W Simon)

 
 

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