Share this article

print logo

Stocks show little movement after five-day rally

U.S. stocks were little changed Wednesday, after a five-day rally in equities that sent the Dow Jones Industrial Average above 18,000 for the first time.

The Standard & Poor’s 500 Index fell less than 1 point to 2,081.88. The Dow rose 6.04 points, or less than 0.1 percent, to 18,030.21. The Russell 2000 Index of small-cap companies jumped 0.4 percent, briefly climbing above its previous closing record. The Nasdaq Biotechnology Index rebounded after a two-day selloff.

The S&P 500 slid more than three points in the final two minutes of trading and the Dow lost about 25 points. Trading in S&P 500 companies was about 30 percent below the 30-day average for this time of day. U.S. equity markets closed at 1 p.m. for Christmas Eve, and will be shut today for the holiday.

“This week has seen the Dow go above 18,000, which is above and beyond the expectations of most in the face of the geopolitical turmoil we have faced this year,” said Daniel Weston, chief investment officer at Aimed Capital GmbH in Munich.

The Dow and S&P 500 closed at all-time highs Tuesday after the biggest five-day rally since 2011. The S&P 500 is up 0.7 percent in December, and has climbed 13 percent for the year.

Stocks took off last week after the Federal Reserve said it will be patient on the timing of an interest-rate increase. Markets rallied to records yesterday after data showed the world’s largest economy expanded at the fastest pace in more than a decade.

U.S. equities had to overcome upheavals in 2014 that threatened to derail a bull market in its sixth year, ranging from violence in the Ukraine to an Ebola outbreak and a bear market in oil prices. Those obstacles were no match against the Fed and the economy. The Dow’s worst retreat was only 7 percent, and the gauge recovered from each decline in about two months.

The Dow has risen about 175 percent during the bull market that began in March 2009, propelled by better-than-estimated corporate results and three rounds of Fed bond purchases. The S&P 500 has more than tripled in that time.

Traders have added the most money on record to a popular exchange-traded fund tracking the S&P 500 since the Federal Reserve released its policy decision last week. The SPDR S&P 500 ETF Trust has absorbed more han $25 billion from Dec. 17 to Tuesday, the biggest five-day inflows in data going back to 2000.

The Russell 2000 has shown resilience this year, recovering from a correction that saw it slip 11 percent over a five-week period starting in early September. The index has surged 15 percent since reaching a one-year low on Oct. 13.

Even with its 3.7 percent gain in 2014, the Russell still trails the S&P 500. The Dow has increased 8.8 percent year-to-date.

Biotech shares had slumped as investors fear health insurers and companies that manage patient’s drug benefits will put new pressure on how much the industry can charge for breakthrough treatments.

The selloff was prompted by Express Scripts Holding Co.’s announcement that it would block its U.S. patients from getting Gilead Sciences Inc.’s $1,100-a-pill hepatitis C medicine.

Gilead rallied 2.1 percent Wednesday after an 18 percent two-day slide. Celgene Corp. surged 3.3 percent, the most in the S&P 500, as it rebounded from a 9.4 percent drop over two days. Biogen Idec Inc. jumped 1.5 percent.

Exxon Mobil Corp. dropped the most in the Dow on Wednesday as oil futures slid more than 3 percent. Denbury Resources Inc., Apache Corp. and Transocean Ltd. tumbled more than 1.9 percent.