US stocks push to record highs, continuing a rally
The Dow Jones industrial average and the Standard & Poor's 500 index closed at record highs Monday as the market delivered its fourth gain in as many trading days.
Pharmaceutical and technology stocks were among the big risers, while shares in energy companies fell sharply as the decline in oil prices deepened. Discouraging data on U.S. home sales failed to derail the "Santa" rally, what traders often call a pre-Christmas advance.
Trading volume was lighter than usual as many investors looked ahead to the Christmas holiday.
"We're getting a good Santa Claus rally," said Sam Stovall, U.S. equity strategist at S&P Capital IQ.
After a strong finish last week, investors remained mostly in a buying mood Monday. The major stock indexes drifted between small gains and losses in the morning, as traders digested the latest housing data.
The National Association of Realtors reported that sales of previously occupied homes fell 6.1 percent last month to a seasonally adjusted annual rate of 4.93 million. That's the slowest pace in six months.
By late morning, the major indexes were rising and holding on to gains that were modest, but good enough for a new set of record highs.
The Standard & Poor's 500 index gained 7.89 points, or 0.4 percent, to 2,078.54. The S&P's most recent record close was 2,075.37, set on Dec. 5.
The Dow Jones industrial average rose 154.64, or 0.9 percent, to 17,959.44. Its last record close was 17,958.79 on Dec. 5.
The Nasdaq composite picked up 16.04 points, or 0.3 percent, to 4,781.42.
The Dow and S&P 500 are both up for the month, while the Nasdaq is down. The three indexes are up for the year.
Market gains this year have been in line with that of prior years that were also preceded by strong growth, noted Stovall.
"On average, the S&P has gained 10 percent in the years following 20-plus-percent advances," he said. "And we're doing just that."
The market is coming off a big advance last week, which gave the S&P 500 its second-biggest weekly gain this year.
The latest rally kicked off last Wednesday, when Federal Reserve Chair Janet Yellen delivered remarks that eased investors' concerns that the central bank would start raising interest rates in response to slowing growth in other major economies.
Looking ahead, trading volume is expected to thin out the next couple of days leading into Christmas.
"A lot of traders and a lot of investors are going to take the whole week off and that might lead to some volatility," said Mike Serio, regional chief investment officer at Wells Fargo Private Bank.
Several economic barometers, including government reports on durable goods, personal income, consumer sentiment and the latest estimate of growth in the third quarter, are due out this week.
"If we see any of those numbers really off track, it might affect the market," Serio said.
Eight of the 10 sectors in the S&P 500 index rose Monday, led by technology stocks. Health care and energy stocks declined.
Pharmaceutical stocks were among those making big moves Monday.
Achillion Pharmaceuticals' shares gained 9 percent after the biotechnology company reported positive results from two studies focusing on a treatment regimen for hepatitis C patients. The stock rose $1.28 to $15.49. Meanwhile, Enanta Pharmaceuticals vaulted 10.1 percent after it received regulatory approval for a hepatitis C treatment. Enanta added $4.70 to $51.32.
Drugmaker Gilead Sciences tumbled 14.3 percent after pharmacy benefits manager Express Scripts said it will no longer cover two of Gilead's hepatitis C drugs as part of an effort to battle the high cost of treatment for the disease. Gilead slid $15.55 to $92.90.
News that Ocwen Financial's executive chairman will resign as part of a settlement that also provides $150 million to homeowners sent shares in the mortgage servicer down 26.9 percent. The stock shed $5.89 to $16.01.
The price of U.S. oil fell on expectations of a further buildup in supplies both in the U.S. and from OPEC producers. Benchmark U.S. crude fell $1.26 to close at $55.26 a barrel in New York. Oil has plunged since peaking at $107 a barrel in June.
Several oil production and exploration companies tumbled as the slide in oil prices deepened Monday.
Nabors Industries fell 53 cents, or 3.9 percent, to $13.10, while Chesapeake Energy slid $1.44, or 7.3 percent, to $18.42. Range Resources shed $2.80, or 4.7 percent, to $57.07. Southwestern Energy dropped $1.69, or 5.5 percent, to $29.31.
In other energy futures trading, wholesale gasoline fell 2.5 cents to close at $1.535 a gallon, while heating oil fell 1.1 cents to close at $1.951 a gallon.
Natural gas fell 32 cents to close at $3.144 per 1,000 cubic feet. Natural gas has fallen 15 percent over the past three trading sessions to its lowest level since January 2013 on forecasts for milder winter weather.
Bond prices rose. The yield on the 10-year Treasury note fell to 2.16 percent.
Metals prices closed lower. Gold fell $16.20 to $1,179.80 an ounce. Silver fell 34 cents to $15.69 an ounce and copper lost a penny to $2.87 a pound.