By Jessica Menton -
U.S. stocks closed higher for the fourth straight session Monday, with the S&P 500 breaking its record closing high for the 50th time this year. As equities extended gains from last week’s rally, shares of social networking giant Facebook Inc. traded as high as $81.88 Monday, hitting a new all-time high.
The Dow rose 154.64 points, or 0.87 percent, to finish at 17,959.44; the S&P 500 stock index climbed 7.89 points, or 0.38 percent, to end at a record closing high of 2,078.54. The tech-heavy Nasdaq Composite index gained 16.98 points, or 0.36 percent, to finish at 4,765.38.
The S&P 500 broke its previous record closing high set on Dec. 5, as social networking giant Facebook Inc. shares hit an all-time intraday high of $81.88. Facebook closed the session up 1.97 percent at $81.45 per share. Around 90 percent of stocks last week hit new highs, as the majority of stocks rose higher than their 200-day moving average, according to Garden State Securities.
The Dow closed within a mere 41 points of 18,000, and analysts say the momentum is definitely there to hit the psychologically important milestone by year's end. “The Dow is just a stone’s throw away from hitting 18,000. I’d be surprised not to see it hit that milestone,” Karl Snyder, chief market strategist at Garden State Securities, said.
The Dow gained in early trading as shares of Boeing rose 1.58 percent to $128.22 Monday after the company announced Chinese airline Air China has agreed to buy 60 Boeing 737 aircraft, which would be valued at more than $6 billion once the deal is finalized. The purchase will also include Boeing’s Next-Generation 737 and 737 MAX airplanes. The Dow Monday was also lifted by gains in the technology sector, as shares of Intel jumped 2.31 percent Monday to close at $37.21 and International Business Machines Corp. rose 1.85 percent to finish at $161.44.
After global oil prices rebounded from five-year lows Friday, crude prices turned negative in afternoon trading Monday. West Texas Intermediate crude, the benchmark for U.S. oil prices, dropped 3.33 percent Monday to $55.23 per barrel, for Jan. 15 delivery, on the New York Mercantile Exchange. Global benchmark Brent crude fell 2.20 percent Monday to $60.03 a barrel on the London ICE Futures Exchange.
However, in contrast to the oil shocks that occurred from 1973-1974, or during 1979, 1980, 1990 and 2003-2004, the current sharp drop in oil prices is conveying benefits to the average worker who has been struggling to see a real increase in wages, according to Chad Morganlander, portfolio manager at Washington Crossing Advisors. “With the average price for a gallon of unleaded gasoline near $2.55 last week, the sudden fall in energy prices positively affects consumers’ income and increases spending,” Morganlander said in a note to clients Monday.
Data Monday showed new home sales slid in November after hitting its highest level of the year, according to a report from the National Association of Realtors. Total existing-home sales, which are completed transactions that include single-family homes, townhomes, condominiums and co-ops, fell 6.1 percent to a seasonally adjusted annual rate of 4.93 million in November from a downwardly-revised 5.25 million in October.
“Fewer people bought homes last month despite interest rates being at their lowest levels of the year,” Lawrence Yun, NAR chief economist, said in the report. “The stock market swings in October may have impacted some consumers’ psyches and therefore led to fewer November closings. Furthermore, rising home values are causing more investors to retreat from the market.”
The report also showed the median existing-home price for all housing types last month was $205,300, 5 percent higher from a year ago, which marks the 33rd consecutive month of year-over-year price gains.
Economists are looking ahead to a series of data points released Tuesday that will reveal the overall health of the U.S. economy, including the government’s final revision of third quarter gross domestic product, along with consumer spending, new home sales and durable goods orders for November.