The Dow hit another record high as the S&P 500 still fell short of record territory.
U.S. stocks closed mostly higher on Thursday, with the S&P 500 closing just shy of record territory as large-cap indexes headed for their best December since 2010.
How to trade stocks
The S&P 500 SPX index rose 1.77 points, or less than 0.1%, to 4,783.35.
The Dow Jones Industrial Average DJIA rose 53.58 points, or 0.1%, to 37,710.10.
The Nasdaq Composite Index fell 4.04 points, or less than 0.1%, to 15,095.14.
What drove the market
U.S. stocks continued to rise during the penultimate trading session of 2023, with the Dow closing at a new record. The blue-chip gauge is expected to post its biggest December gain since 2021, according to Dow Jones Market Data.
Amid light trading volume, the S&P 500 hit its highest since hitting an all-time high of 4,796.56 on January 3, 2022. The index is up 5% so far in December, its best December performance since gaining 6.5. % in December 2010, according to Dow Jones market data.
Traders will be watching closely on Friday, the final trading session of 2023, to see if the S&P 500 can end a difficult year for the stock market on a record note.
“We’re within 12 points (as of January 2022 close), so we’ll see if it goes up today or tomorrow,” said JJ Kinahan, CEO of IG North America, parent company of brokerage Tastytrade. , in an interview with MarketWatch. “It seems incredible that they won’t be testing it before the end of the year.”
Both stocks and bonds have benefited from expectations that the Federal Reserve may cut interest rates aggressively next year. Interest rate cut hopes and signs that the U.S. economy is heading for a soft landing have helped the S&P 500 rise 24.6% since the start of 2023, according to FactSet data.
Stock investors also welcomed the recent sharp decline in benchmark borrowing costs. That’s because the 10-year Treasury yield BX:TMUBMUSD10Y has fallen from more than 5% at its October high to about 3.8% this week. Bond yields move inversely with prices.
Sentiment was boosted this week by strong auctions of US government two-year Treasury notes BX:TMUBMUSD02Y and five-year Treasury notes BX:TMUBMUSD05Y on Tuesday and Wednesday, respectively. This is evidence that the market is easing as government bond yields fall.
But the strong auction streak ended on Thursday when the $40 billion seven-year note BX:TMUBMUSD07Y sale saw weaker-than-expected demand. U.S. stock indices hit record lows the day after the results were announced at 1 p.m. Eastern time, and Treasury yields rose.
Looking ahead, some analysts are wondering whether investors may have jumped the gun by pricing in too many Fed rate cuts next year. Some worry this could mean stocks will fall if expectations change again.
“If global stock markets suffer an Achilles heel in January 2024, we expect the Fed to systematically and continuously cut interest rates throughout the year,” said Nicholas Colas, co-founder of DataTrek Research. He said.
In response to U.S. economic data released Thursday, investors focused on the weekly jobless claims report that showed the number of Americans applying for benefits rose for the second straight week. First-time jobless claims rose by 12,000 to 218,000 in the week ended Dec. 23, according to Labor Department data.
The U.S. merchandise trade deficit rose 0.8% in November to $90.3 billion, according to preliminary estimates from the Commerce Department.
Finally, pending home sales data shows November sales were flat compared to the previous month.
A company that attracts attention
-
Apple Corporation
AAPL,
+0.22%
It ranks slightly higher thanks to a court victory that temporarily allowed sales of the latest Apple Watch to continue. -
Alibaba Holding Group
Baba,
+1.48%
It fell slightly after a U.S. court ruled it must face a lawsuit filed by an American toymaker. stock mullen car
Mulan,
+28.36%
It traded higher on the news after ordering an EV cargo van.
