U.S. stocks climb to all-time highs

The Euro­pean Cen­tral Bank said it will re­duce bond pur­chases, which trig­gered in­ter­est rate hikes.

The Denver Post - - BUSINESS - By Mar­ley Jay

new york» — Af­ter a quiet start, ma­jor U.S. stock in­dexes again set all-time highs Thurs­day as the mar­ket built on a surge the pre­vi­ous day. Banks con­tin­ued to lead the way as bond yields jumped, and small-com­pany stocks soared again.

Bond yields in the U.S. and Europe, par­tic­u­larly in heav­ily in­debted coun­tries, jumped af­ter the Euro­pean Cen­tral Bank sur­prised in­vestors by say­ing it will re­duce the size of its monthly bond pur­chases. That sent in­ter­est rates higher, which makes it prof­itable for banks to lend money.

En­ergy com­pa­nies rose with the price of oil, and com­pa­nies that make chem­i­cals and other ba­sic ma­te­ri­als also climbed. In­dus­trial com­pa­nies and mak­ers of house­hold goods slipped, which held stocks back from even larger gains.

The Dow Jones in­dus­trial av­er­age climbed 65.19 points, or 0.3 per­cent, to 19,614.81. The Stan­dard & Poor’s 500 in­dex picked up 4.84 points, or 0.2 per­cent, to 2,246.19.

The Nas­daq com­pos­ite had lagged be­hind the other ma­jor in­dexes over the last two weeks, but it re­bounded along with tech­nol­ogy com­pa­nies and rose 23.59 points, or 0.4 per­cent, to 5,417.36.

The Rus­sell 2000 in­dex of small-com­pany stocks jumped 21.87 points, or 1.6 per­cent, to 1,386.37.

The Euro­pean Cen­tral ex­tended its bond­buy­ing eco­nomic stim­u­lus pro­gram and will spend about $579 bil­lion through the end of 2017. But start­ing in March it will be­gin spend­ing less on bonds.

While the bank said it’s not get­ting ready to phase out its stim­u­lus pro­gram, John Canally, an in­vest­ment strate­gist for LPL Fi­nan­cial, said in­vestors re­al­ize the ECB will grad­u­ally stop buy­ing bonds and will start rais­ing in­ter­est rates in re­sponse to a health­ier econ­omy.

Govern­ment bond prices in Spain, Italy and Por­tu­gal fell, and yields rose sharply.

U.S. govern­ment bond prices also fell. The yield on the 10-year Trea­sury note rose to 2.41 per­cent from 2.34 per­cent. That drove banks stocks up since higher in­ter­est rates will al­low banks to charge more for lend­ing money. Gold­man Sachs, which has surged 33 per­cent since the pres­i­den­tial elec­tion and is trad­ing near its all-time high, rose $5.89, or 2.5 per­cent, to $241.45, and Bank of Amer­ica picked up 38 cents, or 1.7 per­cent, to $22.95.

Bench­mark U.S. crude rose $1.07, or 2.1 per­cent, to $50.84 per bar­rel in New York. Brent crude added 89 cents, or 1.7 per­cent, to $53.89 a bar­rel in Lon­don.

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