Dow Jones closes above 18,000 for first time

  • 23 December 2014
  • From the section Business

The Dow Jones has closed above 18,000 for the first time after figures showed the US economy grew at its fastest rate in 11 years in the third quarter.

The Dow rose 64 points to 18,024, while the S&P 500 also climbed, ending up three points to 2,082.

But the Nasdaq lost 16 points to close at 4,765.

Official figures released earlier on Tuesday showed the economy grew at an annual rate of 5% in the quarter, up from a previous estimate of 3.9%.

Despite the strong growth figure, separate data on durable goods orders - seen as a proxy for business investment - disappointed as it showed a fall of 0.7% in November.

'Merry Christmas'

However, analysts were cheered by the pick-up in GDP.

"That is a solid number, that is really what you want to see, you want to see it in demand," Jack Ablin, chief investment officer at BMO Private Bank in Chicago, told Reuters.

"That is a huge plus, a five handle on GDP is astounding to me, but I'm not going to turn it away - Merry Christmas."

The Dow Jones has gained 9% this year and set 36 record closes in the process.

Meanwhile the S&P 500 is up almost 13% and has recorded 51 record highs.

Some market-watchers are confident that the gains have further to go.

"You have to understand that US economic output is at an all-time high and corporate profits are at an all-time high,'' said Cameron Hinds, regional chief investment officer at Wells Fargo Private Bank.

"Bull markets typically don't die purely of old age, they tend to die of recessions and overvaluation and perhaps policy mistakes, and we don't see any of those on the horizon," he added.

Market movers

Among individual shares, Hertz jumped more than 8% after the firm raised prices for car rentals beginning next year.

The company said the move was to compensate for the rising costs of running its fleet of cars.

Alibaba fell almost 3% after a report in the Wall Street Journal reported that an Alibaba service to help foreign brands break into China was delivering disappointing sales.

Shares in Chevron and Exxon Mobil gained more than 1% after oil prices rose.

The benchmark price for Brent Crude added $1.61 to $61.72 a barrel and US West Texas Intermediate Crude rose $1.84 to $57.15 a barrel.

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