Stocks continued to hit new highs Wednesday in an absence of fresh economic data and as trading volume remained light.
The Dow rose more than 20 points, a day after reaching a new 28-month high amid half the usual volume on the New York Stock Exchange.
Walt Disney , McDonald's, and Chevron rose, while Alcoa and JPMorgan fell.
The S&P 500 has marched forward since breaking through a resistance level of 1,255 late last week. The Nasdaq also gained, although it was slightly below a new three-year record reached last week. The CBOE Volatility Index, widely considered the best gauge of fear in the market, fell below 17.
Among key S&P 500 sectors, energy, materials, and consumer discretionary, rose, while utilities and financials fell.
The markets have continued to rise all month, with the S&P 500 ending higher for 16 of the last 19 trading sessions.
As of the close Tuesday, the Dow rose 5.2 percent for December and 11 percent for the year-to-date. The S&P 500 rose 6.6 percent for the month, and 12.9 percent for the year-to-date. The Nasdaq rose 6.6 percent for December, and 17.4 percent for the year-to-date.
While the tax cut package passed by Congress earlier this month should continue to buoy stocks, Bob Enck, CEO of Equinox Fund Management, an alternative asset manager, said investors were showing some hesistance about the future momentum of U.S. stocks moving into alternative assets, such as futures and commodities, that do not move in tandem with the U.S. equity markets.
"The flows into non-correlated assets is telling us there is some caution out there still," Enck said.
The market was bracing for a Treasury auction of $29 billion in 7-year notes Wednesday, following an auction of five-year Treasury notes Tuesday that attracted the lowest demand since June. Treasury prices, as a result, are lower and yields are higher, with the 10-year note hitting its highest yield since October 2009. Results of this session's Treasury auction will be released shortly after 1 p.m.
Oil slipped to just above $91 a barrel on Wednesday as weather warmed in the Northeast.
Energy stocks, boosted by higher oil prices, led the market higher, with new 52-week highs seen among oil producers and servicers, such as Chevron, Exxon Mobil, Conoco Phillips, and Marathon Oil. Exploration and production companies including Murphy Oil,Devon Energy, and Apache. Noble Energy, which also hit a 52-week high, confirmed an offshore property in Israel was the country's largest natural gas find.
The dollar was slightly lower against a basket of currenciesas the euro stabilized. Copper prices continued to soar, as gold traded at two-week highs, above $1,400 an ounce.
In company news, Blackrock was expected to launch an internal trading platform in 2011, which the money manager said will be one of the world's largest and will offer low trading costs.
BJ's Wholesale Club soared after a report in the New York Post that Leonard Green & Partners may launch a hostile bid for the warehouse retailer if an auction doesn't take place in the the next few weeks. The Post cited an unnamed source close to the situation.
The Blackstone Group, meanwhile, has its eyes Centro Properties Group, an Australian shopping-center company, the Wall Street Journal reported, citing unnamed sources. According to the Journal, Blackstone is mainly interested in Centro's 600 U.S. properties.
Rare earth producers were in focus as China offered conflicting statements on its quotas. Beijing had announced an 11 percent cut in its quotas for the first half of 2011, but later said it hadn't decided, according to the Ministry of Commerce.
In the U.S., Molycorp rose a day after a see-saw session, as traders bid the stock up on reports the rare earth producer was close to starting its Mountain Pass mine, and then sold it off after the company said it doesn't expect to remove ore from the mine until late next year at the earliest.
In tech news, Microsoft co-founder Paul Allen refiled a suit against rivals Apple , Google and Facebook, among others, lodging specific charges against the companies for illegally using Microsoft technology. An earlier lawsuit had been dismissed because it didn't specify products or devices.
Google and Yahoo , meanwhile, got a boost from Hudson Square Research, which started both search companies with a "buy" rating.
In health care news, Savient Pharmaceuticals declined after announcing it had begun a search for a CEO. Paul Hamelin, Savient's president since November 2008, will head the company until a chief executive is found.
No economic news was on the calendar Wednesday. The Mortgage Bankers Association's report on mortgage applications for the week ended Dec. 24, will be released with data for the following week on Wednesday, Jan. 5.
On Thursday, the Labor Department will release weekly jobless claims and the National Association of Realtors will release its pending home sales index. The Chicago purchasing managers index will also be released.
European indexes were higher, with the exception of the FTSE-100, was lower in its first day of trading after the Christmas holiday. Asian indexes closed mostly in the green, but mining stocks dragged on the Australian market.
Coming Up This Week:
WEDNESDAY: 7-year Treasury note auction.
THURSDAY: Jobless claims, Chicago PMI, pending home sales, farm prices, money supply, Massey CEO Blankenship retires.
FRIDAY: No major economic data expected.
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