Stocks edged up for a fourth straight day to score another round of records Wednesday, supported by rosier U.S. economic data and ongoing hopes for a U.S. - China trade deal, but Wall Street trading volumes were thinner than usual ahead of the Thanksgiving Day holiday Thursday.
U.S. financial markets will be closed Thursday for Thanksgiving Day and will have an abbreviated trading schedule on Friday.
Read: When do markets close for Thanksgiving?
What are major indexes doing?
The Dow Jones Industrial Average DJIA, +0.15% closed up 42.32 points or 0.15% at 28,164.00 for a record, while the S&P 500 SPX, +0.42% gained 13.11 points or 0.42% to 3,153.63 and the Nasdaq COMP, +0.66% ended up 57.24 points or 0.66% at 8,705.18.
Each of the three major indexes closed at a record.
The small-cap Russell 2000 RUT, +0.61% rose 0.6% to end at 1,634.10, hitting a 52-week high. The index’s breakout this week has cheered stock-market bulls, who argued it clears the way for broader stock market gains as well as small-cap outperformance.
Check out: What a small-cap ‘breakout’ means for the broader stock market heading into 2020
What drove the market?
Investors waded through a heavy round of U.S. economic data Wednesday, including a revised estimate of third-quarter GDP that showed the U.S. economy expanded at a 2.1% annual pace versus a previous estimate of 1.9%.
The number of people who applied for first-time unemployment benefits fell sharply in the week before Thanksgiving, putting claims back near historic lows. Initial claims declined 15,000 to 213,000 in the week ended Nov. 23, the Labor Department said, though many economists caution against reading too much into any one week’s worth of claims data around this time of year.
Also, orders for durable goods rose 0.6% in October, the government said, defying forecasts for a 1.1% drop, though most of the gain was tied to defense-related goods such as jet fighters and ships.
U.S. consumer spending rose in October for the eighth month in a row, a potentially good sign for the holiday shopping season that gets underway after Thanksgiving with Black Friday specials.
A gauge of inflation favored by the Federal Reserve dipped to a 1.6% yearly gain in October, from a previous 1.7% run rate, the government said. Personal incomes were flat, and consumer spending rose 0.3% while the savings rate ticked down modestly.
Finally, the Federal Reserve’s Beige Book reported U.S. businesses have seen continued growth in economic activity, wages and prices during recent weeks, and they maintain a generally positive outlook.
The economy “expanded modestly” from October through mid-November, the Fed said in its periodic report of anecdotes from business contacts around the country, in what was an improvement from the October report, when the Fed described growth as “slight to modest.”
“We can be thankful that the economy is still in a good place with economic growth a little better, a rebound in business durable equipment expenditures, and a sharp decline in joblessness which together tell the story that recession is nowhere to be seen and should not be on anyone’s radar in 2020,” MUFG chief economist Chris Rupkey said.
“Political uncertainty, impeachment, trade war with China and the world, none of these headlines as yet show an economy that is about to go down,” he added.
The positive tone for U.S. equities this week has also been attributed in large part to upbeat expectations for a U.S. - China trade deal. President Donald Trump on Tuesday said U.S.-China negotiations were in the “final throes,” while China’s Commerce Ministry said Vice Premier Liu He, the country’s top trade negotiator, spoke with U.S. Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin.
But some analysts worry investors have gotten too euphoric, leaving the stock market vulnerable to a pullback in the case of another trade-related setback, or even if an agreement is reached in the near term.
See: Beware stock-market ‘FOMO’ as Wall Street churns out record highs, says long-term bull
“Looking ahead, extra caution may be warranted. With markets having broken new records again and again on signals that this phase one deal is drawing closer, it’s fruitful to ask how much upside – if any – there’s still in store once that agreement is officially completed,” said Marios Hadjikyriacos, investment analyst at XM, in a note.
“Is a phase one deal practically priced in by now, and are we therefore looking at a potential ‘buy the rumor sell the fact’ reaction once it’s wrapped up?” he asked.
Also read: Investors have already priced in a U.S. - China trade deal, according to these indicators
Which companies are in focus?
Apple AAPL, +1.34%, Amazon AMZN, +1.20% and Facebook FB, +1.52% each gained more than 1%.
Shares of Hudson’s Bay Co., HBC, +11.33% the parent company of Saks Fifth Avenue, roared 14% higher after reports Catalyst Capital Group had offered C$11 per share to acquire the company.
Under Armour Inc. UAA, +6.17% rose more than 6% after it was upgraded to strong buy from outperform at Raymond James based on sales of new products and an upbeat outlook about the federal accounting investigation now underway.
Boeing BA, -1.48% lost 1.5% and weighed on the Dow, after the Federal Aviation Administration said it will keep full control over approvals of each new Boeing 737 Max built since the planes were grounded in March, rather than delegating some of the work to Boeing employees. Also the fuselage of a Boeing 777X split open during a stress test in September, according to the Seattle Times.
Deere & Co. DE, -4.30% shares fell 4.3% after the maker of agricultural equipment issued a profit warning for fiscal 2020 and said uncertain farmers are reluctant to invest in new equipment.
Shares of Dell Technologies Inc. DELL, -5.40% fell 5.4% after the PC manufacturer cut its revenue guidance late Tuesday and cited a shortage of chips from Intel Corp. INTC, -0.66%.
Shares of HP Inc. HPQ, -1.35% lost 1.3%, after the computing giant reported a modest bump in fourth-quarter revenue, while offering improved earnings guidance.
How are other markets trading?
U.S. Treasury yields were slightly higher Wednesday on better-than-expected U.S. economic data with the benchmark 10-year yield TMUBMUSD10Y, +1.38% edging up to 1.76%.
Gold futures traded slightly lower Wednesday, remaining under pressure as U.S. stocks continue to push into record territory on optimism over trade talks between Washington and Beijing. Gold for February delivery, now the active contract GCF20, +0.18% on Comex was off $6.90, or 0.4%, at $1,460 an ounce
The U.S. dollar was firmer against a basket of currency rivals, as measured by the ICE US Dollar DXY, -0.08%
Oil prices turned lower Wednesday after official U.S. inventory data posted an unexpected rise in the latest week but prices remained near their highest levels in eight weeks. West Texas Intermediate crude futures for January delivery CLF20, -0.64% were down 20 cents, or 0.3%, at $58.22 a barrel on the New York Mercantile Exchange. January Brent crude BRNF20, -0.45%, the global benchmark, fell 19 cents, or 0.3%, to $64.08 a barrel on ICE Futures Europe.
Meanwhile, the Stoxx Europe 600 SXXP, +0.32% closed up 0.3% at 409.81.
In China overnight Wednesday, the CSI 300 Index 000300, -1.90% ticked down 16 points, 0.4%. Japan’s Nikkei 225 NIK, -0.12% rose 0.3%, and Hong Kong’s Hang Seng Index HSI, -0.19% rose 0.2%.