Dow continues rally, closes up 100 points after strong economic data, hopes for falling rates: Live updates

The Dow Jones Industrial Average closed higher on Thursday as the 10-year Treasury tumbled below 4% and a surprise gain in retail sales gave investors further confidence 2024 would bring a soft economic landing.

The 30-stock Dow closed at a record high, ending the day up 158 points, or 0.43% at 37,248.35. On Wednesday, it marked its first-ever close above 37,000. The S&P 500 added 0.26% to end the day at 4,719.55, while the Nasdaq Composite gained 0.19% to 14,761.56.

The 10-year Treasury note yield dropped below 4% for the first time since August as traders mounted bets on rate cuts for 2024. The move lower in interest rates follows the Dow’s more than 1% jump on Wednesday to reach a record high above 37,000 after the Federal Open Market Committee indicated it may cut rates three times next year.

“The Fed delivered the dovish pivot that we expected heading into the December meeting,” Michael Gapen, chief U.S. economist at Bank of America, wrote on Wednesday. “While we did not expect the Fed to move to an outright easing bias, we did expect it to move to a more balanced reaction function and, in the event, we think it did just that.”

Solar stocks ticked higher as yields fell. The Invesco Solar ETF (TAN) climbed more than 8.1%, with constituents SunRun and Enphase gaining 20% and 12%, respectively. Shares of Moderna climbed 9.3% after trial data showed its experimental cancer vaccine reduced the risk of death or reoccurrence when used alongside Merck’s Keytruda.

The S&P could soon join the Dow in record territory, as the index is less than 1.6% away from reaching its all-time close set in January of 2022The Nasdaq is about 8% away from its closing record and roughly 9% further to go to reach its intraday record.


Stocks close higher

Stocks closed higher on Thursday, with the Dow Jones Industrial Average continuing its rally after notching its best ever close a day earlier.

The 30-stock Dow gained 158 points, or 0.4%, to close at 37,248.35. The S&P 500 added 0.3% to finish the session at 4,719.55, while the Nasdaq Composite gained 0.2% to 14,761.56.

— Brian Evans


Bank stocks may rip in 2024 as they did in 1995, RBC Capital says

Bank stocks may outperform the rest of the U.S. stock market in 2024 as they did in 1995 — when they soared 54% to the S&P 500′s 34% advance, according to RBC Capital analysts led by Gerard Cassidy in a 124-page report out Thursday.

“In the second half of 2024, we see continued improvement in the fundamentals as the Federal Reserve gradually lowers the Federal Funds rate, loan growth starts to accelerate, loan loss provisions begin to fall and capital return through share repurchases begins to accelerate,” RBC said.

Until the bank stocks outperform, they’ll continue to offer solid income, Cassidy wrote. “Going forward, we expect dividends will be maintained or increased over the next 12-18 months, which is a significant contrast to 2008-09 when 18 out of the top 20 banks either cut or eliminated their dividends.”

Regional banks that had seen sharp declines earlier in 2023 have soared this week after Federal Reserve policymakers acknowledged that lower interest rates are in store — three in 2024. While the SPDR S&P Regional Banking ETF is ahead 9.4% this week and almost 19% in December, many individual banks have done ever better. Western Alliance Bancorp has risen 17% this week and 29% this month; Citizens Financial has climbed 14% and 24%; Columbia Banking System has gained 11% and 24%.

— Scott Schnipper


Deutsche’s Chadha tells investors to look beyond mega cap tech

2023′s narrow market rally doesn’t concern, Deutsche Bank chief U.S. equity and global strategist Bankim Chadha. The ‘Magnificent Seven’ stocks that have outperformed this year were the same stocks that sold off last year, Chadha told CNBC’s “Power Lunch” on Thursday.

“So why would we expect everybody else to rally when they didn’t really fall that much?” said Chadha, referring to stocks outside the mega cap tech sphere.

Chadha, who has a 5,100 base case for the S&P 500 in 2024, believes growth may be in other areas besides the large cap tech names next year.

“I wouldn’t be short on [mega cap tech] because they do grow their earnings a lot faster than everybody else does. But we are looking for the rally to broaden so I would look elsewhere for now,” Chadha said.

— Hakyung Kim


Big tech companies underperform Thursday

Mega cap tech names lagged behind the market, inching into negative territory amid broader market gains.

Microsoft and Netflix fell around 2.3% as of Thursday afternoon. Amazon and Alphabet declined 1.1% and 0.9%, respectivelyApple and Meta Platforms also saw their shares decline by 0.2% and 0.5%, respectively.

Meanwhile, the S&P 500 was up 0.2%, while the Nasdaq Composite inched up 0.1%.

— Hakyung Kim


Oil settles 3% higher on weaker dollar, demand outlook upgrade

Oil prices settled 3% higher on Thursday on a weaker dollar and slight upgrade to demand growth in 2024.

The West Texas Intermediate contract for January gained $2.11, or 3.04%, to settle at $71.58 a barrel, while the Brent contract for February rose $2.35, or 3.16%, to settle at $76.61 a barrel.

The U.S. dollar also dropped to a four-month low Thursday after the Federal Reserve indicated the rate hikes were over. A weaker dollar makes oil cheaper, which can lift demand.

And the International Energy Agency on Thursday said global oil demand would grow by 1.1 million barrels per day in 2024, up slightly from its previous forecast of 930,000 barrels per day.

— Spencer Kimball


Former Dallas Fed leader says market shouldn’t overreact on latest moves

Former Dallas Federal Reserve President Robert Kaplan cautioned Thursday against reading too much into his former colleagues’ actions this week.

Specifically, he addressed comments from Chair Jerome Powell, who said the Fed is now looking into how restrictive it wants to be on policy now that inflation is receding and the economy has avoided recession.

“This was a conversation destined to happen. He had to preview it at some time, and chose yesterday,” Kaplan said during an interview on CNBC’s “Squawk on the Street.” “People should not overreact to what he said. He left his options open. He thinks they’re done, it’s likely the next move will be down, but he’s keeping his options open.”

—Jeff Cox

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