Dow tops 18,000 as market reaches new highs

The Dow Jones industrial average broke through 18,000 points for the first time Tuesday as the stock market continued a late-year march to record highs.

Investors welcomed the latest encouraging news on the economy as the government said the U.S. grew at the fastest pace in more than a decade in the third quarter. The market is heading for its fifth straight gain as indexes recover the last of the ground they lost in an early-December slump.

KEEPING SCORE: The Dow Jones industrial average rose 81 points, or 0.5 percent, to 18,041 as of 10:35 a.m. Eastern time. The Standard & Poor’s 500 gained four points, or 0.2 percent, to 2,082. The Nasdaq composite fell nine points, or 0.2 percent, to 4,772.

GROWTH SPURT: The Commerce Department reported that the economy grew at a 5 percent annual rate in the July-September period, powered by stronger consumer spending and business investment. That’s the fastest quarterly growth since the summer of 2003.

ECONOMIC BAROMETERS: Investors were monitoring a mixed bag of economic reports early Tuesday. Consumer spending grew at the fastest pace in three months in November, while income posted the best gain in five months. Factory orders for long-lasting manufactured goods declined last month. And sales of new homes slid 1.6 percent in November to a seasonally adjusted annual rate of 438,000, the second consecutive monthly decline.

SECTOR VIEW: Nine of the 10 sectors in the S&P 500 moved higher, with materials stocks posting the biggest gain. Health care stocks fell. Chesapeake Energy led the gainers in the S&P 500, rising $1.23, or 6.7 percent, to $19.67. Celgene paced the decliners, falling $7.57, or 6.7 percent, to $106.03.

GOOD MEDICINE: Shares in Walgreen rose after the drug store chain reported better-than-expected fiscal first-quarter earnings. The stock rose 76 cents, or 1 percent, to $74.96.

HOLIDAY RALLY: Major stock indexes have ended higher the past four trading days, with the Dow and S&P 500 closing at record highs on Monday. Investors have been encouraged by signs of strength in the U.S. economy and reassurances that the Federal Reserve won’t interest rates soon. Trading volume is expected to thin out the next couple of days as the market shifts into Christmas holiday mode. On Wednesday, U.S. and European markets close early.

OVERSEAS ACTION: In Europe, France’s CAC-40 added 1.3 percent and Germany’s DAX rose 0.4 percent. Britain’s FTSE rose 0.5 percent. In Asia, the Shanghai Composite Index closed down 3 percent, while Hong Kong’s Hang Seng shed 0.3 percent and Seoul’s Kospi lost 0.2 percent. India’s Sensex declined 0.6 percent.

ENERGY: Oil prices stabilized after a recent rout. Benchmark U.S. crude rose 97 cents to $56.23 per barrel.

BONDS: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.19 percent.

 

Copyright 2014 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.

 

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