Wall Street drifts higher as strong year for markets winds down

NEW YORK

Wall Street drifted to a slightly higher close as trading remained light on this holiday-shortened week.

The subdued activity in the market with two trading days left in the year is capping off a broader rally to a strong finish. The S&P 500 is coming of its eight straight winning week and is hovering just below its all-time high set in January of 2022.

The S&P 500 rose 6.83 points, or 0.1%, to 4,781.58. It is up 24% for the year. The Dow Jones Industrial Average rose 111.19 points, or 0.3%, to close at 37,656.52.

The technology-heavy Nasdaq composite rose 24.60 points, or 0.2%, to 15,099.18. It has outpaced other major indexes with a gain of 44% this year.

“Consistent buying pressure of this magnitude is not only rare but a bullish sign for improving investor sentiment and market momentum,” said Adam Turnquist, chief technical strategist for LPL Financial, in a note to investors.

Health care stocks and a mix of retailers had some of the strongest gains. Eli Lilly rose 1.9% and Costco rose 1.1%.

U.S. crude oil prices fell 1.9% and weighed down energy stocks. Marathon Oil fell 1.2%.

Markets in Europe and Asia gained ground.

Bond yields fell significantly. The yield on the 10-year Treasury, which influences mortgage rates, fell to 3.79% from 3.90% late Tuesday. Yields have been falling over hopes that inflation has cooled enough for the Federal Reserve to consider cutting interest rates in 2024.

Several biotechnology companies made big moves after giving investors updates on drug development. Cytokinetics surged 82.5% on an encouraging study update for a potential heart condition treatment. Iovance Biotherapeutics shed 18.7% after pausing a study on a potential lung cancer treatment because of a possible safety issue.

The final week of 2023 lacks any big economic updates. Overall, investors have been encouraged by reports showing inflation is on the decline even as the economy appears stronger than expected. The Fed is walking a tightrope, seeking to slow the economy enough through high interest rates to cool inflation, but not so much that it tips the nation into recession.

Inflation slowed to a rate of 2.6% in November, according to a measure closely followed by the Fed.