US stocks have jumped to new records after strong economic data gave new momentum to last week’s rally.
The Dow Jones Industrial Average gained 73.47 (0.45 per cent) to 16,294.61, while the broad-based S&P 500 advanced 9.67 (0.53 per cent) to 1,827.99 on Monday. Both were new records, building on record closes from Friday.
Meanwhile, the tech-rich Nasdaq Composite Index added 44.16 (1.08 per cent) at 4,148.90.
The new peaks came after fresh Commerce Department data pointed to a 0.5 per cent increase in consumer spending in November, the second month in a row to see a rise.
An estimate of consumer confidence by the University of Michigan also showed an improvement in December.
“The economic news was very good,” said Peter Cardillo, chief market economist at Rockwell Global Capital. “It’s all about the economy expanding at a faster rate.”
Monday’s data came on the heels of last week’s surprising upgrade to the third-quarter estimate of gross domestic product growth and a move by the US Federal Reserve to scale back its bond-buying program due to the improving economy.
Tech giant Apple jumped 3.8 per cent after announcing it reached a long-awaited deal with China Mobile to significantly boost its iPhone presence on the world’s biggest wireless operator.
Facebook rose 4.8 per cent after Cantor Fitzgerald boosted its earnings estimates, citing a strong advertising performance during the crucial holiday shopping period. Monday was also the first day of trade since Facebook was added to the prestigious S&P 500.
Other technology companies also jumped, including Google (+1.3 per cent), Twitter (+7.6 per cent) and LinkedIn (+0.6 per cent). A report on Monday said mobile phone consumers are spending more time on websites associated with all three companies, according to Bank of America Merrill Lynch.
Jos A Bank Clothiers dipped 1.3 per cent after announcing it had rejected a takeover proposal from Men’s Wearhouse after concluding the offer “significantly undervalued” the company.
Jos A Bank said it would continue to look at strategic acquisition opportunities. Men’s Wearhouse fell 0.7 per cent.
Micron Technologies lost 3.1 per cent after Bank of America Merrill Lynch downgraded the chip maker, citing more promising offerings from other competitors.
Bond prices fell. The yield on the 10-year US Treasury rose to 2.93 per cent from 2.89 per cent, while the 30-year edged higher to 3.84 per cent from 3.82 per cent. Bond prices and yields move inversely.