After The Close - The major U.S. equity indexes opened to the upside today and never looked back, extending the so-called Santa Claus rally. To be sure, trading remained light in the wake of the Christmas holiday observance, but the few market participants who were around had some positive news to confirm their recent enthusiasm. For one thing, the U.S. Labor Department’s report on unemployment claims came in more favorably than expected. Meanwhile, there was further confirmation that holiday shoppers were not too tight with their purse strings this year. Specifically, MasterCard Advisors reported that sales rose 2.3% between November 1st and December 24th, with an assist from stepped-up discount and promotional activity on the part of retailers. This was accompanied by reports that package shipper United Parcel Service (UPS) had trouble keeping up with the last minute surge of business, while Amazon.com (AMZN) had to limit new membership to its Prime shipping service. The consumer turnout was all the more notable in light of the fact that there were six fewer shopping days between Thanksgiving and Christmas this year, while inclement weather affected certain parts of the country.
Looking at the numbers, the Dow Jones Industrial Average posted its sixth-straight positive close, rising 12 points, or three-quarters of a percentage point. This also marked the 50th time this year that the blue chip index posted a new high. Not to be outdone, the broader S&P 500 Index also closed at another new all-time peak (the 44th time it has done so in 2013), rising nine points or half a percent. The tech-laden NASDAQ, though far from its record high of over a decade ago, remains the top performer of the three for the year to date. It also reached new high ground as it nudged up about one-quarter of a percent, or 12 points. -Mario Ferro
At the time of this article’s writing, the author did not have positions in any stocks mentioned.
12:20 PM EST - Stocks are moving higher again today on the first full day of trading since Monday. The markets closed early on Tuesday for Christmas Eve, and did not open at all yesterday in observance of the Christmas holiday. Right around the noon hour on the East Coast, the Dow Jones Industrial Average is up 71 points and the NASDAQ is better by 11 points. The broader market reflects the push higher, with the number of advancing issues easily outpacing decliners on both the New York Stock Exchange and the NASDAQ.
There was little in the way of business news this morning. One piece of data did come from the Labor Department, which reported that initial weekly unemployment claims fell by a hefty 42,000, to 338,000. That was the biggest drop in over a year. But the figures can be volatile in the holiday season stretching from Thanksgiving to New Year’s. In fact, the less volatile four-week average rose by 4,250, to 348,000. Still, the report was enough to keep spirits high on Wall Street, where equities are riding a wave of enthusiasm.
The economic data pushed bond yields higher, too, with the yield on the 10-year Treasury note touching 3.00% today. That is the highest level since September, and indications are that yields are headed higher still, given a strengthening economy. Down the road, the trend toward higher interest rates may provide some competition for stocks, but so far the bulls are in the driver’s seat.
Among individual stocks, shares of Tesla Motors (TSLA) are on the rise, as the company’s top safety rating was affirmed. The electric-car maker had seen concerns rise after a series of fires in its vehicles.
Twitter (TWTR) stock has also resumed its climb, as sentiment toward shares of the social media company runs high.
As for more traditional names, Exxon Mobil (XOM - Free Exxon Stock Report) shares are the top gainer of the Dow Industrials. Oil prices are inching close to the $100-a-barrel mark in NYMEX trading, helped by the day’s positive economic data that suggest layoffs are easing.
Heading into the afternoon session, stocks are holding on to their gains, apparently headed for their sixth straight advance and another record close for the Dow. -Robert Mitkowski
At the time this article was written, the author did not have a position in any of the companies mentioned.
Stocks to Watch from The Survey – Corporate news is fairly light on the heels of the Christmas holiday, but there are a few companies making headlines this morning. Notably, Japan’s Softbank is reportedly in talks to acquire wireless carrier T-Mobile US (TMUS). Shares of T-Mobile are moving slightly higher in early morning trading on the news. Meanwhile, the co-founder of BlackBerry (BBRY), Michael Lazaridis, has reportedly cut his stake in the struggling mobile device maker, sending the stock lower in the premarket. – Kathryn M. Drew
At the time of this article’s writing, the author did not have positions in any of the companies mentioned.
Before the Bell - The stock market continued its ascent toward new all-time highs on Tuesday in holiday shortened trading. In all, stocks rose at the open, principally on upbeat economic data and continued expectations that the Federal Reserve will remain wedded to an easy money policy well into the new year. And they never looked back.
All told, by the close, the Dow Jones Industrial Average and the Standard and Poor's 500 Index had surged to new record closing highs. In the Dow's case, the 63-point gain brought that index up to 16,357. For the S&P 500 Index, the five-point rise pushed that composite to 1,833. The NASDAQ, meantime, which remains well short of a record, also rose on the day, tacking on seven points, putting that index above 4,150. In all, the NASDAQ is up more than 37% for the year.
Meantime, as noted, the market was the beneficiary of some good economic news, as the Commerce Department reported that new home sales had come in above expectations for November, with sales totaling 464,000 units on an annualized basis. Although that was off a bit sequentially (sales had been at 474,000 in October), sales were above expectations and also higher than the initially estimated total of 444,000 for October. Data for September also were revised higher. Clearly, while mortgage rates have come up notably over the past year and mortgage applications are trending lower, actual demand for houses remains quite brisk, suggesting that 2014 will be another solid year for this generally recovering market. Orders for durable goods also did better than expected last month, gaining a strong 3.5%. Expectations had been for a more modest 2.2% increase.
In addition to stocks heading higher--and the market's gain was rather broad based on the day--interest rates also rose, with the yield on the 10-year Treasury note climbing to just over 2.98%, which is the high point of the year. Thus, while Wall Street was generally happy with the Fed's recent monetary actions and its accommodative stance on both bond buying and interest rates, there is no question that the mere possibility of ending the quantitative easing program some time next year is enough to send borrowing costs up somewhat. Also rising on the day was gold, which has been in its own bear market this year. Specifically, gold futures reclaimed the $1,200-an-ounce level, as some apparently are betting that the precious metal can regain some luster on 2014 following a brutal year in 2013. Copper also gained on the day. Gold is a bit higher this morning, holding several dollars an ounce above $1,200.
Overall, on this day before Christmas, there was strength in some heretofore out-of-favor groups, which is normal toward the end of a year, when much of the tax-loss selling in such areas as the basic materials, the precious metals, the aluminum, and steel stocks has been exhausted. In fact, some of these issues have performed fairly well of late after a difficult year for much of 2013. At the same time, a number of groups have continued to do well, and stocks within them have seen further buying in recent sessions.
Clearly, the Santa Claus rally came on schedule this year, and with most economic indicators pointing to additional healthy economic growth in the weeks and months to come, there is every reason to expect the market to make added progress as we wind down a stellar 2013.
Meanwhile, hopefully all of our readers had a joyous and happy Christmas yesterday with time spent around family and friends. Now, we look ahead to the final two trading sessions of the holiday shortened week. And here, the early read on the equity markets is slightly positive, with the Standard and Poor's 500 Index futures ahead by two points and the NASDAQ futures better by more than six points. Thus, the market should get an initial lift, which will be helped, as well, by data just issued showing a substantial decline in weekly jobless claims. - Harvey S. Katz
At the time of this article's writing, the author did not have positions in any of the companies mentioned.