S&P closes at record high as growth stocks surge
U.S. stock prices rose on Tuesday, and the S&P 500 closed at a record high. A flurry economic data including a reading for economic growth drove bond yields up and elevated "growth names".
Commerce Department reported that gross domestic product grew at an annualized rate of 4.3% in the 'third quarter,' the fastest pace seen since the third-quarter of 2023. This is well above the 3.3% estimated by economists surveyed by, and was fueled by robust consumption.
According to CME's FedWatch Tool and the rising yields on shorter-dated bonds, the markets now price in a lower chance of the Federal Reserve cutting rates by January.
Stephen Massocca is a senior vice-president at Wedbush Securities, San Francisco. He said that the bond market was not happy with this news.
"It appears to me that if we lose this battle, growth is good, and today, growth is doing well... But if you are a food company or chemical company or oil and gas company or even a private credit firm, then that's bad. It's bad unless interest rates drop."
The preliminary data shows that the S&P 500 rose 31.24 points or 0.45% to 6,909.73, and the Nasdaq Composite advanced 133.02 or 0.57% to 23,561.84. The Dow Jones Industrial Average grew 79.33?0.16% points to 48,442.01.
The S&P 500 Growth Index?gained almost 1%, while the Value index was largely unchanged. AI-related stocks added to recent gains. They rebounded from last week's sale, which was triggered by fears about inflated valuations.
Nvidia was the largest contributor to the benchmark S&P 500 Index, while Amazon.com Alphabet, and Broadcom all saw gains exceeding 1% for the day. Other economic data paint a less rosy picture of the economy. U.S. Consumer confidence declined in December due to?deepening anxieties over jobs and income. The factory production in November was the same as in October, after a decline in October.
All three major indexes are on track for a third consecutive year of gains. S&P 500, Dow Jones and other major indexes are also expected to rise for an eighth month in a row.
Stock Trader's Almanac reports that recent gains in U.S. stock prices have sparked hopes for a "Santa Claus Rally", a seasonally occurring phenomenon in which the S&P 500 'posts gains' in the last five days of the calendar year and in the first two of January.
This year the period starts on Wednesday and ends in January?5.
The trading volume was light, and is likely to continue to be so as the holidays approach. The U.S. Stock Markets will close at 1 pm ET (1800 GMT) on Wednesday. ET (1800 GMT), on Wednesday, and will be closed on Christmas Day.
ServiceNow declined to purchase Armis after the enterprise software maker agreed on a $7.75 billion cash deal.
Huntington Ingalls, a U.S. military shipbuilder, gained ground after President Donald Trump revealed plans for the new "Trump Class" of battleships. He said they would be bigger, faster, and "100-times more powerful" than anything previously built.
The stock of Freeport-McMoRan rose after it reached a record-high price for copper, $52.29, and Wells Fargo increased its target price on the company's shares.
(source: Reuters)
