Dow lands its second-highest close in history as stocks build on eight-week winning streak

Read: S&P 500 is moving toward record territory. Here’s what stock-market investors need to know.

What drove markets

The S&P 500’s streak of eight consecutive weekly gains is its longest since the week ending Nov. 3, 2017. For the Dow, it marked the longest winning run since Feb. 22, 2019.

With three trading days left in the year, “the S&P 500 still has a shot at hitting a record high and extending its streak of up weeks to nine, which would be its longest run since 2004,” said Chris Larkin, managing director for trading and investing at E-Trade from Morgan Stanley.

The focus “will quickly pivot to whether the market will be able to sustain its momentum into the new year, and that may depend on how long the good vibes surrounding potential Fed rate cuts lasts,” Larkin said in emailed comments.

Many investors may now be looking for a so-called Santa Claus rally to further fuel stock-market gains, which have been driven as of late by optimism that the Federal Reserve may begin cutting interest rates as early as the first half of 2024.  

That rally period often sees stocks rise during the last five trading days of the calendar year and the first two trading sessions of the new year. However, some analysts have cautioned that investors should dial back their expectations for this seasonal year-end gift, believing that rate-cut hopes may be overly optimistic.

In One Chart: What a strong ‘Santa Claus rally’ says about the U.S. stock market in January — and 2024

Still, “with the market up so much this year, punctuated with an eight-week winning streak, there are not many sellers willing to book taxable gains to avoid a weak possibility of a correction,” said Louis Navellier, chair and founder of Navellier & Associates.

Opinion: Chasing the Santa Claus rally? Look out below!

Data released Friday showed that the rate of U.S. inflation based on the Federal Reserve’s preferred gauge, the personal-consumption expenditures index, fell in November for the first time since 2020, indicating that price pressures continue to subside.

In data released on Tuesday, the S&P CoreLogic Case-Shiller 20-city home-price index rose a seasonally adjusted 0.6% in October compared to the previous month. Home prices in the 20 major U.S. metropolitan markets were up 4.9% in the 12 months ending in October. A broader measure of home prices, the national index, rose 0.6% in October and was up 4.8% from the previous year. 

The 20-city and national indexes are each at record highs.

The rest of this week will bring only a smattering of economic updates. Data on weekly jobless-benefit claims and pending home sales will be released on Thursday.

And next week will mark another shortened week for traders, with markets closed on Monday in observance of the New Year’s Day holiday.

Companies in focus

• Apple Inc.
  AAPL,
  -0.40%
  shares ended 0.3% lower, their fourth-straight day of declines, after the Wall Street Journal reported that the tech behemoth appealed a federal trade agency’s ban of two Apple Watch models because of patent violations.

• Shares of Intel Corp.
  INTC,
  +0.04%
  rose 5.2% after Israel’s government said the chip giant would invest $25 billion in the country. The investment comes after Intel secured $3.2 billion in incentives from Israel, according to Bloomberg.

• Manchester United Ltd. shares
  MANU,
  
  ended up 3.4% after British billionaire Jim Ratcliffe clinched a 25% minority stake in the iconic English soccer club.

Barbara Kollmeyer contributed.