Santa Claus rally': US markets hit new highs again

The Dow and S&P 500 stock indices rose to fresh records on Monday in what Wall Street observers are calling a "Santa Claus rally" and another positive day for global equity markets still cheered by last week's US Federal Reserve meeting. -- PHOTO
The Dow and S&P 500 stock indices rose to fresh records on Monday in what Wall Street observers are calling a "Santa Claus rally" and another positive day for global equity markets still cheered by last week's US Federal Reserve meeting. -- PHOTO: AFP

NEW YORK (AFP) - The Dow and S&P 500 stock indices rose to fresh records on Monday, another positive day for global equity markets still cheered by last week's US Federal Reserve meeting.

The broad-based S&P 500 advanced 7.89 points (0.38 per cent) to 2,078.54, about three points above the previous high on Dec 5.

The Dow Jones Industrial Average jumped 154.64 (0.87 per cent) to 17,959.44, a little less than a point above the prior record.

The tech-rich Nasdaq Composite Index gained 16.04 (0.34 per cent) to 4,781.42.

US stocks have been on a tear since the Fed last Wednesday kept interest rates low and left in place market expectations that it may raise interest rates only in the middle of 2015 and not sooner.

European and Asian markets also rose Monday, generating talk of a "Santa Claus rally".

"There's still a buying mood, a feel that central banks are going to keep being supportive, and the news on the US economy keeps getting better," said Mr Alan Skrainka, chief investment officer at Cornerstone Wealth Management.

Biotech company Gilead Sciences slumped 14.3 per cent after prescription management company Express Scripts announced that AbbVie's Viekira Pak treatment for hepatitis C would be an exclusive treatment in many cases. The decision will cut into sales of Gilead's Sovaldi drug.

Some of Gilead's peers in biotech also had a bad day. Amgen lost 3.3 per cent, Biogen shed 2.3 per cent and Celgene lost 3.1 per cent.

Dow member Boeing rose 1.6 per cent after announcing an order with Air China for new aircraft in a deal worth more than US$6 billion (S$7.9 billion).

Petroleum-linked companies were under stress, as both oil and US natural gas prices fell sharply. Anadarko Petroleum lost 1.4 per cent, Continental Resources dipped 1.6 per cent and ConocoPhillips dropped 2.1 per cent.

Bond prices rose. The yield on the 10-year US Treasury dropped to 2.16 per cent from 2.18 per cent on Friday, while the 30-year dipped to 2.75 per cent from 2.77 percent. Bond prices and yields move inversely.