Stocks Move Mostly Higher To Close Out Strong Year - U.S. Commentary

(RTTNews) - Closing out a strong year on an upbeat note, stocks moved mostly higher over the course of the trading day on Tuesday. The Dow and the S&P 500 set new record closing highs, while the Nasdaq once again reached is best levels since 2000.

The major averages moved to the upside in the final hour of trading, ending the day firmly in positive territory. The Dow climbed 72.37 points or 0.4 percent to 16,575.66, the Nasdaq advanced 22.39 points or 0.5 percent to 4,176.59 and the S&P 500 rose 7.29 points or 0.4 percent to 1,848.36.

For the year, the Dow surged up by 26.5 percent, while the Nasdaq and the S&P 500 jumped by 38.3 percent and 29.6 percent, respectively. The S&P 500 showed its biggest annual advance since 1997.

The strength on Wall Street on Tuesday partly reflected window dressing on the final trading day of the year, with some mutual fund managers looking to improve their yearly performance.

Some buying interest was also generated by the release of a report from the Conference Board showing a bigger than expected rebound by consumer confidence.

The Conference Board said its consumer confidence index jumped to 78.1 in December from 72.0 in November. Economists had expected the index to climb to 76.8 from the 70.4 originally reported for the previous month.

Lynn Franco, Director of Economic Indicators at the Conference Board, noted that the rebounded lifted the index back near pre-government shutdown levels. The index came in at 80.2 in September.

A separate report from Standard & Poor's showed that home prices rose at the fastest annual rate in over seven years in October, while MNI Indicators released a report showing a bigger than expected slowdown in the pace of growth in Chicago-area business activity in December.

Nonetheless, trading activity was somewhat subdued on the day, with many traders away from their desks ahead of the New Year's Day holiday on Wednesday.

Among individual stocks, shares of Hertz (HTZ) moved sharply higher after the car rental company adopted a one-year shareholder rights plan in response to "unusual and substantial activity" in the company's shares.

Marvell Technology (MRVL) also moved to the upside on news that investment firm Kohlberg Kravis Roberts has bought a 6.8 percent stake in the chip maker.

Sector News

After coming under pressure in the previous session, gold stocks showed a strong move back to the upside on the day. The NYSE Arca Gold Bugs Index surged up by 2.4 percent after tumbling by 2.6 percent on Monday.

The rebound by gold stocks came despite a modest decrease by the price of the precious metal, with gold for February delivery dipping $1.50 to $1,202.30 an ounce.

Brokerage stocks also turned in a strong performance, driving the NYSE Arca Broker/Dealer Index up by 1.2 percent. With the gain, the index reached a five-year closing high.

Railroad, oil, and airline stocks also saw notable strength on the day, moving higher along with most of the other major sectors.

Other Markets

In overseas trading, stock markets across the Asia-Pacific region moved mostly higher on Tuesday, although several markets were closed for holidays. China's Shanghai Composite Index advanced by 0.9 percent, while Hong Kong's Hang Seng Index rose by 0.3 percent.

European stocks also moved to the upside amid an abbreviated trading session. The U.K.'s FTSE 100 Index climbed by 0.3 percent, while the French CAC 40 Index ended the day up by 0.5 percent. The German markets remained closed.

In the bond market, treasuries came under pressure on the day, offsetting the strength seen in the previous session. Subsequently, the yield on the benchmark ten-year note, which moves opposite of its price, rose by 5 basis points to a two-year closing high of 3.026 percent.

Looking Ahead

Following the holiday on Wednesday, trading on Thursday could be impacted by the release of reports on weekly jobless claims, manufacturing activity, and construction spending.