New York (AFP) – The New York Stock Exchange continued its end-of-year momentum on Tuesday, propelling the Dow Jones to a new record, while the broader S&P 500 index, the most representative of the market, approached its historical peak.
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The Dow Jones gained 0.68%, closing at 37,557.92 points, its fifth consecutive record. The Nasdaq, predominantly technology-based, rose 0.66%, finishing at 15,003.22 points.
The S&P 500 advanced 0.59%, ending at 4768.37 points, less than twenty points below its last historical high, reached in January 2022.
“It looks like we may finally have that year-end bull market we were hoping for,” commented Jack Ablin, an analyst at Cresset.
The market is celebrating “the combination of slower growth with lower inflation, which has been acknowledged by Fed Chairman Jerome Powell, who has mentioned the possibility of rate cuts later,” explained the analyst.
The market continued to ignore remarks from Federal Reserve officials trying to backtrack on the idea that members of the institution are already discussing a schedule of rate cuts, as the Fed chief suggested last week.
“We hear Fed governors trying to dampen market enthusiasm, but investors don’t want to listen to them,” added Jack Ablin, interviewed by AFP.
“It is an emotionally charged market and investors are enthusiastic,” he assured.
The bond market, meanwhile, remained calm, with the yield on ten-year Treasury notes settling at 3.93%, the same as the previous day.
Released on Tuesday, housing data on new home building starts in the United States surprised with its strong performance in November (+14.8% month-over-month).
It provided further support for the assumption of a soft landing for the economy.
However, investors are especially waiting for Friday’s release of the PCE inflation index for November, the Fed’s preferred gauge of price increases.
According to Art Hogan, an analyst at B. Riley Wealth Management, “if the core PCE figure is in line with expectations,” which are +0.2% for November, “the buzz about Fed interest rate cuts could continue,” and with it, the stock market’s momentum.
On the market, aircraft manufacturer Boeing gained 1.19% after Lufthansa ordered 40 737-8 MAX aircraft, its first order from Boeing in almost 30 years. Lufthansa also ordered 40 Airbus A220-300 aircraft.
Following positive analyst ratings, shares of solar energy equipment company Sunnova gained 14.96%.
Shares of pharmaceutical company Kenvue, maker of Tylenol, climbed 2.19%. The company was sought after a favorable court decision. A judge ruled that hundreds of lawsuits against the company did not provide sufficient evidence that taking acetaminophen–a component of the Tylenol pain reliever–posed risks to the fetus’ development.
Arvinas, a lab specializing in cancer treatments, soared 6.89%, also benefiting from momentum in the pharmaceutical sector. Bristol-Myers Squibb rose 1.50%, Amgen 1.07%.
US Steel, which had surged 26% the day before after the announcement of a takeover agreement by Nippon Steel Corporation for around $14.1 billion, fell 2.44% to $48.38. The proposed price by the buyer is $55 per share.
© 2023 AFP
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