NEW YORK, (Reuters) – U.S. stocks rose yesterday, 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 today and will be closed all of tomorrow
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 U.S. 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.
“Everyone is surprised, and I’m definitely pleased,” said Wayne Kaufman, chief market analyst at Phoenix Financial Services in New York. “But the question is, how can inflation be so low when GDP is so high? Either this is just a one-off and GDP will fall back dramatically, or we’ll see a pickup in inflation, which could put more pressure on the Fed.”
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.