While much of the nation’s weather has turned frigid, the U.S. stock market remains red-hot. Notching its latest 1,000-point milestone, the Dow Jones Industrial Average rose 151 points, or 0.6 percent, to close at a record 25,073.
Stocks aren’t only scaling new heights — they’re reaching those peaks more quickly: The blue-chip index reached the 24,000 point threshold only in November. The Nasdaq Composite Index also reached a new milestone this week, closing above 7,000 for the first time amid strong profit growth by technology companies.
That strength continued Thursday as tech stocks outpaced the rest of the of market. Banks also are benefiting from higher bond yields, which allow them to charge higher interest rates on mortgages and other kinds of loans.
The S&P 500 gained 11 points, or 0.4 percent, to end at 2,724. The Nasdaq added 12 points to 7078.
Stocks had a historically strong year in 2017, with the S&P 500 rising nearly 20 percent and recording gains in all 12 months — the first time that’s happened. December also marked a record 14th consecutive month of increases, with the index rising in 21 out of the last 22 months.
The bull market, which started its climb in 2009 as the Great Recession ended, has been powered of late by renewed economic growth, robust corporate profits energized by the recently enacted tax overhaul and the strongest labor market in nearly two decades.
“The complete tax plan is even more stimulative for economic and earnings growth than we had anticipated in November,” analysts with the Wells Fargo Investment Institute said this week in raising their 2018 market forecasts.
Unemployment has fallen to 4.1 percent, the lowest level in 18 years. Analysts with Barclays Capital forecast that above-trend growth will take the jobless rate to well under 3 percent. The nation’s GDP — the broadest gauge of economic growth — rose a vigorous 3.2 percent in the third quarter, the second straight quarter it has topped 3 percent.
Stocks could get another boost when the Labor Department releases its latest employment report on Friday. Forecasters expects that the economy added roughly 190,000 jobs in December, which is more than enough to keep unemployment ticking down.
Although that could raise concerns about inflation if wage growth accelerates, for now investors remain sanguine.
“I do believe we’ll see 30,000 before this bull market ends, but we are going to have a lot more turbulence between now and that next large round number,” Chris Zaccarelli, chief investment officer with the Independent Advisor Alliance, said in a note.
Barclays predicts that the S&P 500, the broadest U.S. stock index, will finish the year at 3,150 points, which would represent a nearly 18 percent gain. Major factors expected to fuel the run-up are stronger corporate earnings, stock buybacks and healthy consumer spending.
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