Dow, S&P hit record highs; Apple's China deal lifts techs

NEW YORK Mon Dec 23, 2013 5:40pm EST

1 of 3. Trader Peter Tuchman smiles as he works on the floor of the New York Stock Exchange after the market opening in New York, December 23, 2013.

Credit: Reuters/Carlo Allegri

NEW YORK (Reuters) - U.S. stocks climbed on Monday, with the Dow and S&P 500 advancing to all-time highs as a distribution deal by Apple Inc with China Mobile boosted the technology sector.

Apple (AAPL.O) rose 3.8 percent to $570.09, its biggest percentage gain in three months, after the tech titan said on Sunday it had signed a long-awaited agreement with China Mobile Ltd (0941.HK)(CHL.N) to sell iPhones through the world's biggest network of mobile phone users, a deal that could add billions of dollars to its revenue.

Apple's rally helped power the S&P technology sector index .SPLRCT to a gain of 1.5 percent, making it the best performer of the 10 major S&P sectors. The stock's massive market capitalization helped lift both the S&P 500 and the Nasdaq. U.S.-listed shares of China Mobile rose 1.6 percent to $52.47.

"It is up nicely on this news, and it's not bad news. But I thought it was something people were kind of already aware of," said Stephen Massocca, managing director at Wedbush Equity Management LLC in San Francisco.

Volume was light, with about 4.68 billion shares traded on U.S. exchanges, well below the 6.49 billion average so far this month, according to data from BATS Global Markets.

This week, volume is expected to be thin, with many market participants out for the Christmas holiday. Equity markets will close early on Tuesday and will be closed all of Wednesday. The light volume could amplify market volatility.

"I've got traders calling me up saying, 'You got anything going on? I've got nothing.' Everyone is looking for something that's moving. This is just the way it is when it comes to the Christmas holidays," said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio, Texas.

The Dow Jones industrial average .DJI rose 73.47 points or 0.45 percent, to end at 16,294.61, a record high. The S&P 500 .SPX gained 9.67 points or 0.53 percent, to finish at a record 1,827.99.

The Nasdaq Composite .IXIC advanced 44.163 points or 1.08 percent, to close at 4,148.903, its highest since August 2000.

The Dow also touched an all-time intraday high at 16,318.11, while the S&P 500 climbed to a record intraday high at 1,829.75.

Both the Nasdaq and the S&P 500 got a lift from Facebook Inc (FB.O), which jumped 4.8 percent to end at a record $57.77, in the social networking company's first day of trading as an S&P 500 component. Facebook also set an all-time intraday high of $58.32 during Monday's session.

The Dow's and the S&P 500's runs to all-time highs extended the market's sharp gains from last week, the strongest week for the major U.S. stock indexes in months.

The rally was fueled by strong economic data and the U.S. Federal Reserve's decision to begin trimming its stimulus program next month, which removed a major source of uncertainty for the market. The Fed also said its key interest rate would stay at rock bottom longer than previously promised.

"Clearly what the Fed did was right down the sweet spot, and it was quite frankly what the market wanted to hear. But now it is in the market, and we have to wait for new events," Massocca said.

The S&P 500 has soared 28.2 percent this year, largely due to the Fed's stimulus measures, and is on track for its best year since 1997.

The Dow has climbed 24.3 percent in 2013, while the Nasdaq has jumped 37.4 percent.

In the latest economic data, consumer sentiment hit a five-month high heading into the end of the year, and spending notched its strongest month since the summer, the latest signs of sustained vigor in the economy that are increasing hopes of a strong 2014.

Retail stocks will continue to garner attention in the final shopping days leading up to Christmas. In a sign that this season may be a difficult one for the sector, U.S. consumers shopped less during the final weekend before Christmas despite deeper discounts, according to analytics firm RetailNext.

Target Corp (TGT.N) may encounter particular trouble in the wake of a massive data breach. The Wall Street Journal reported that the retailer suffered reduced customer traffic over the weekend, which is one of the busiest of the year. Target's stock fell 1 percent to $61.88.

Advancing stocks outnumbered declining ones on the New York Stock Exchange by 2,165 to 883, while on the Nasdaq, 1,902 stocks rose and 722 shares declined.

(Additional reporting by Curtis Skinner; Editing by Jan Paschal)

We welcome comments that advance the story through relevant opinion, anecdotes, links and data. If you see a comment that you believe is irrelevant or inappropriate, you can flag it to our editors by using the report abuse links. Views expressed in the comments do not represent those of Reuters. For more information on our comment policy, see http://blogs.reuters.com/fulldisclosure/2010/09/27/toward-a-more-thoughtful-conversation-on-stories/
Comments (18)
aaronc2 wrote:
“Apple is incredibly undervalued at this stage, and this deal can help it trade well beyond $600 early in 2014.” yeah right Gary…

Dec 23, 2013 9:04am EST  --  Report as abuse
expat75 wrote:
What a strange Alice in Wonderland world we live in in the United States. On the one hand we like the cheapness of their made-in- China goods & manufactured under harsh conditions, and our invasion of their markets by huge US companies like Apple, GM, Ford, etc., but not a reciprocity.
As regards to our foreign policy we are treating China as a threat to our national security, stationing US battle fleets off their shores, and raising tensions that could cause a conflict. Any historian will tell you that China is the least aggressive of any major power. Since the time of Genghis Khan, they have been the victims of aggressors like Japan, and now the United States. Let us treat them with respect

Dec 23, 2013 11:24am EST  --  Report as abuse
AlkalineState wrote:
How does Apple’s success equate to broad success? I feel good because my competitor is making a ton of money. Therefore……things must be great :)

Dec 23, 2013 11:39am EST  --  Report as abuse
This discussion is now closed. We welcome comments on our articles for a limited period after their publication.