December 11, 2017
Tuesday, December 23, 2014

Dow ends above 18k for first time on strong GDP report

US stocks rose with the Dow closing above 18,000 for the first time ever and the S&P 500 ending at a record after an unexpectedly strong report on economic growth.

The Nasdaq ended modestly lower, pressured by the biggest selloff in biotech names in many months, while trading was light ahead of the Christmas holiday. Markets will close early on Wednesday and will be closed all of Thursday.

Both the Dow and S&P 500 hit intraday records in their fifth-straight day of gains. The Dow rose as high as 18,069.22 and is up about 175 percent from a 12-year closing low hit on March 9, 2009. The S&P's record close was its 51st such record this year.

The final estimate for third-quarter US economic growth was revised up to a 5 percent annual pace, its quickest in 11 years and easily topping expectations for growth of 4.3 percent.

The report spurred a broad rally, with nine of the ten primary S&P 500 sectors higher on the day. The only group to fall was healthcare, down 2.2 percent alongside a massive drop in biotech stocks.

The Nasdaq biotech index fell 4.6 percent, its biggest one-day decline since April 10. Components of the index made up the top six percentage decliners on the S&P; Celgene Corp fell 6.5 percent to $106.12 while Biogen lost 4.7 percent to $335.76. Regeneron Pharmaceuticals fell 4.6 percent to $394.05.

Gilead Pharmaceuticals fell 3.7 percent to $89.45, extending Monday's drop of 14 percent, which came after Express Scripts said it would abandon covering Gilead's hepatitis C treatment in favor of a cheaper option.

The Dow Jones industrial average rose 64.67 points, or 0.36 percent, to 18,024.11, the S&P 500 gained 3.64 points, or 0.18 percent, to 2,082.18 and the Nasdaq Composite dropped 16.00 points, or 0.33 percent, to 4,765.42.

Advancing issues outnumbered declining ones on the NYSE by 1,990 to 1,090, for a 1.83-to-1 ratio on the upside; on the Nasdaq, 1,399 issues rose and 1,353 fell for a 1.03-to-1 ratio favoring advancers.

The benchmark S&P 500 index was posting 124 new 52-week highs and 5 new lows; the Nasdaq Composite was recording 182 new highs and 53 new lows.

About 5.41 billion shares traded on all US platforms, according to BATS exchange data, compared with the month-to-date average of 7.78 billion.

A fall in Greek stocks kept a lid on gains in European equities, as the Athens bourse was hit by the prospect of early elections that could put Greece's rescue package at risk.

The pan-European FTSEurofirst 300 index closed up 0.6 percent at 1,374.80 points, with the index up 4.4 percent since the start of 2014.

The broader European equity landscape was helped by positive economic news from Spain and Portugal.

The Bank of Spain raised its economic forecast while Portugal's budget deficit shrank.

However, Athens' benchmark ATG equity index underperformed due to uncertainty over Greek politics. The ATG, which dropped nearly 20 percent in the second week of December, ended 1.7 percent lower.

The Greek parliament on Tuesday failed to elect a new president in a second-round vote. It has one more chance to do so next week to avert elections that could bring to power a party that wants to renegotiate the country's bailout deal, end years of austerity and write off some Greek debt.

Prime Minister Antonis Samaras, whose term is not due to end until mid-2016, has offered to bring pro-European independents into government and hold elections by late next year if they support Stavros Dimas, the only candidate in the presidential race.

Across Europe, Britain's benchmark FTSE 100 closed up 0.3 percent, Germany's DAX rose 0.6 percent while France's CAC advanced 1.4 percent.

Portugal's PSI-20 equity index outperformed to rise 1.8 percent after the reduction in Portugal's budget deficit, while Madrid's IBEX also advanced 1 percent after the Bank of Spain forecast faster economic growth.

However, the FTSE ended off its intraday highs after data showed Britain's deficit with the rest of the world had risen to 27 billion pounds ($42 billion), equivalent to 6.0 percent of gross domestic product (GDP), matching the biggest deficit on record.

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Tags:  Stocks  shares  FTSEurofirst  Nikkei  US  Dow Jones  

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