Wednesday, December 3, 2014
Stocks Maintain Record Highs
U.S. stocks rallied into the close, with the Dow and S&P 500 ending the day at records amid encouraging economic reports on Wednesday.
Earlier, stocks held modest gains on the release of the Federal Reserve's Beige Book that said the economy continues to expand.
The energy sector rose about 1 percent and was a leader on the S&P 500, helped by stabilization in oil prices and a report that showed a drop in oil supply for the last week.
In the morning, the ISM services index beat expectations with a leap to a three-month high of 59.3 for November. Before the open, ADP report on private payrolls showed sector employment is keeping up its recent pace in November, although the 208,000 new jobs was a shade below expectations.
U.S. non farm productivity grew a bit faster than initially thought in the third quarter, while sharp downward revisions to compensation pointed to muted wage inflation that should give the Federal Reserve room to keep interest rates low for a while.
Weekly jobless claims come out on Thursday, and the all-important jobs report is due on Friday.
Philadelphia Fed President Charles Plosser said the Fed's preferred inflation measure is running somewhat below its longer-term target but is above the level that should stoke concerns of deflation.
The Federal Reserve is only in the early stages of developing a set of macroprudential tools to ensure financial stability and faces limits because of the divided nature of U.S. financial sector oversight, Fed governor Lael Brainard said on Wednesday at a seminar on financial stability at the Brookings Institution in Washington, D.C.
The Dow Jones Industrial Average closed up 32.94 points, or 0.18 percent, at 17,912.49, withUnitedHealth leading gains among 17 blue chips and American Express the greatest laggard.
The S&P 500 gained 7.78 points, or 0.38 percent, at 2,074.33, with materials leading sector gains and consumer staples the greatest of three laggards.
The Nasdaq closed up 18.66 points, or 0.39 percent, at 4,774.47.
Two stocks advanced for every decliner on the New York Stock Exchange, with an exchange volume of 757 million and a composite volume of 3.5 billion in the close.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, traded above 12.
The Dow Jones Transports gained nearly 1 percent.
The benchmark 10 year Treasury note yield fell to 2.28 percent. The U.S. dollar touched five-and-a-half-year highs against major world currencies.
Crude oil futures for January delivery settled up 50 cents at $67.38 a barrel on the New York Mercantile Exchange. Gold futures for February closed up $9.30 to $1,208.70 an ounce.