Stocks Get Jolly as 'Santa Claus' Rally Rides Signs of Improving U.S. Economy
NEW YORK ( TheStreet) -- Heading into the Christmas holiday, U.S. stocks can't find a reason to fall. It's been a jolly good year for investors who bet long on equities.
In a year that is poised to be the best for stocks since 1997, equity markets extended gains in a shortened session on Tuesday after data showed manufacturing grew in November while new home sales rose. That's two more bits of positive economic data to pair with upbeat readings on consumer spending that came earlier in the week.
Fueled by those upbeat indicators, the S&P 500 climbed 0.29% to finish at 1,833.32. The Dow Jones Industrial Average added 0.39% to 16,357.55 while the Nasdaq lifted 0.16 to 4,155.42.
The U.S. Census Bureau reported that durable-goods orders for November jumped 3.5% from the prior month -- orders dropped 0.7% in October -- and new orders excluding transportation increased 1.2%. Economists were expecting orders to rise 1.5% and 0.8%, respectively.
"The better-than-consensus 3.5% m/m jump in durable goods orders in November, although partly due to a bounce back in the volatile aircraft category, suggests that fourth-quarter business investment in equipment may have picked up a bit," Amna Asaf, an economist at Capital Economics, wrote in a note to clients on Tuesday.
Showing continued strength in other part of the economy was new home sales for November, which rose 464,000 -- the best reading since July. It was more than economists' expectations of 450,000. The report, by the U.S. Census Bureau, upwardly revised October sales to 474,000 from a prior reading of 354,000.
Markets jumped on Monday as improved consumer spending and sentiment data coupled with an upgrade in the International Monetary Fund's outlook for the U.S. economy added to a raft of economic news in recent weeks that suggested the economy is growing at a healthy clip despite a pullback in Federal Reserve stimulus.
Major equity markets closed at 1 p.m. on Tuesday for the Christmas break, and reopen Thursday at the regularly scheduled time.
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