Stocks got the New Year off to a roaring start Thursday with more solid gains and record highs for major U.S. indexes, following up on a strong finish to 2019.
The Dow Jones Industrial Average climbed more than 300 points, as shares in Walt Disney, Boeing, Apple and other big companies rose. Technology sector stocks accounted for a good part of the upward move. Smaller-company stocks lagged the broader market’s gains.
The market has been grinding higher for weeks, pushing indexes to record highs, as concerns about the strength of the economy and the possibility of further escalation in the U.S.-China trade war have eased. Three interest rate cuts by the Federal Reserve and signals that the central bank is in no hurry to raise rates this year have also helped steady markets after a summer slump.
“At this point, the momentum we saw in December is carrying into January,” said Willie Delwiche, investment strategist at Baird. “It might take a little bit to really figure out whether the optimism expressed in U.S. stocks all of last year is warranted with respect to fundamentals, but for now, the benefit of the doubt is with the bulls.”
The S&P 500 climbed 27.07 points, or 0.8%, to 3,257.85. The Dow rose 330.36 points, or 1.2%, to 28,868.80. The Nasdaq composite gained 119.58 points, or 1.3%, to 9,092.19. All three indexes notched new record highs.
Smaller company stocks didn’t fare nearly as well. The Russell 2000 index slid 1.70 points, or 0.1%, to 1,666.77.
The latest gains follow a blockbuster performance by the market in 2019. The S&P 500 and Nasdaq closed out the year Tuesday with their best annual performance since 2013.
Bond prices rose. The yield on the 10-year Treasury fell to 1.88% from 1.91% late Tuesday.
U.S. stocks headed higher from the get-go Thursday as markets reopened following the New Year’s Day holiday. The market got a boost following a rally overseas after China’s central bank said it will free up more money for lending.
China’s central bank said it will cut the amount of money banks will be required to have on hand from Jan. 6. The move is expected to boost the country’s slowing economy ahead of the Lunar New Year, which falls on Jan. 25.
“China’s cutting is a reminder that central banks are providing liquidity,” Delwiche said.
Investors continued to wait for Washington and Beijing to formalize an initial trade deal that has helped ease the market’s jitters over the 18-month dispute between the world’s two biggest economies.