After a brief breather yesterday, the bulls regained their solid footing to resume their rally, with the U.S. equity markets again attaining fresh highs with industrials leading the way. Financials also saw solid gains on the heels of continued steepening of the Treasury yield curve, while the U.S. dollar prolonged its recent string of gains, despite reads on small business optimism and job openings missing forecasts. Crude oil prices rallied to multi-year highs amid the continued global economic optimism and expectations of tighter supplies, and gold was lower.

The Dow Jones Industrial Average (DJIA) rose 103 points (0.4%) to 25,386, the S&P 500 Index gained 4 points (0.1%) to 2,751, and the Nasdaq Composite increased 6 points (0.1%) to 7,164. In moderate volume, 801 million shares were traded on the NYSE and 2.1 billion shares changed hands on the Nasdaq. WTI crude oil jumped $1.23 to $62.96 per barrel and wholesale gasoline rose $0.05 to $1.84 per gallon. Elsewhere, the Bloomberg gold spot price fell $6.92 to $1,313.48 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—gained 0.2% to 92.53

The National Federation of Independent Business (NFIB) Small Business Optimism Index for December fell to 104.9, from November’s unrevised 107.5 level, which was the highest level in over three decades, versus the Bloomberg expectation of a slight gain to 107.8.

The Labor Department’s Job Openings and Labor Turnover Survey (JOLTS), a measure of unmet demand for labor, came in at a level of 5.88 million jobs available to be filled in November, down from the revised 5.93 million level in October. This compared to forecasts calling for a 6.03 million level. The hiring rate dipped to 3.7% from October’s 3.8% pace, and the separation rate edged lower to 3.5% from the prior month’s 3.6% rate.

Treasuries were lower, with the yield on the 2-year note rising 1 basis point (bp) to 1.97%, while the yields on the 10-year note and the 30-year bond increased 7 bps to 2.55% and 2.89%, respectively. The Treasury yield curve continues to steepen and the U.S. dollar has maintained its current streak of gains.

Schwab Center for Financial Research – Market Analysis Group

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