More holiday cheer on Wall Street: Stocks end higher

Stocks notched more gains Tuesday as Wall Street kicked off what’s expected to be a quiet, holiday-shortened week of trading.

The S&P 500 rose 0.4%, finishing less than 0.5% below its all-time high set nearly two years ago. The benchmark index is coming off eight straight weekly gains, its longest winning streak since 2017.

The Dow Jones industrial average rose 0.4%, and the Nasdaq composite ended 0.5% higher.

Trading was relatively light as U.S. markets reopened after the Christmas Day holiday. Still, the latest gains were widespread, with advancers outnumbering decliners by nearly 3 to 1 on the New York Stock Exchange.

Technology and industrial stocks accounted for a big share of the gains. Intel climbed 5.2% for the biggest gain among S&P 500 stocks. Caterpillar added 1.8%.

Energy stocks climbed as the price of U.S. crude oil rose 2.7%. Hess closed 1.4% higher.

Solid gains by stocks of smaller companies also helped lift the market, pushing the Russell 2000 index 1.2% higher.

Treasury yields were mixed. The yield on the 10year Treasury held steady at 3.90%.

Some stocks surged on company deal news. Drugmaker Bristol-Myers Squibb said Tuesday that it would acquire RayzeBio in a $4.1billion deal, just days after buying Karuna Therapeutics for $14 billion. BristolMyers shares fell 1.6%, and RayzeBio doubled to $61.40, close to the $62.50 that each share would fetch in the acquisition.

Shares in HollySys Automation Technologies jumped 5.2% after the company received an updated buyout offer from a consortium led by Dazheng Group Acquisition.

Stratasys vaulted 13% to $14.82 per share after Nano Dimension announced it had offered to pay $16.50 per share in cash for the maker of 3-D printers. Stratasys had rejected an earlier buyout bid from Nano Dimension in April.

Gracell Biotechnologies surged 60.3% after the Shanghai biopharmaceutical company agreed to be acquired by AstraZeneca.

All told, the S&P 500 rose 20.12 points to 4,774.75. The Dow advanced 159.36 points to 37,545.33, and the Nasdaq added 81.60 points to close at 15,074.57.

With less than a week to go in 2024, the S&P 500 is now up more than 24% for the year, and the Nasdaq is up 44%.

Investors have been encouraged by reports showing that inflation is on the decline even as the economy appears stronger than expected.

The Federal Reserve is walking a tightrope, seeking to slow the economy enough through elevated interest rates to cool inflation, but not so much that it tips the nation into recession.

Traders are still largely betting the Federal Reserve will cut its main interest rate by at least 1.50 percentage points by the end of next year, according to data from CME Group. The federal funds rate is currently sitting within a range of 5.25% to 5.50%, its highest level in more than two decades.

The Federal Reserve released projections earlier this month showing its typical policymaker expects to cut the federal funds rate several times next year, but probably by only half as much as what Wall Street is expecting.

But many see too much optimism over the pace of interest rate cuts early in the year and believe that the big run for stocks since late October on anticipation of such support may be overdone.

This week is light on economic reports. The Federal Reserve Bank of Richmond will issue its monthly manufacturing activity index Wednesday. On Thursday, the Labor Department will release its weekly tally of unemployment benefit claims and the Commerce Department will deliver its preliminary November snapshot of wholesale inventories.

European markets remained closed Tuesday.

Shanghai’s benchmark led losses in Asia on heavy selling of technology and computer chip-related shares as worries revived over trade tensions with the U.S. and other Western countries.

A number of video game companies announced share buybacks to shore up prices after Chinese regulators issued draft guidelines on Friday that caused shares in game makers such as Tencent and Netease to plunge. Hong Kong markets were closed Tuesday.

The Shanghai composite index sank 0.7%. In Shenzhen, where relatively more high-tech companies are listed, the A-share index lost 1.2%.