The Dow closed 196.92 points higher, or 0.7%, at 30,606.48. The S&P 500 climbed 0.6% to 3,756.07, while the Nasdaq Composite advanced 0.1% to 12,888.28. The major averages hit their session highs with less than one hour left of trading.
Intel rose 2.2% to lead the Dow higher. Financials and utilities advanced more than 1% each to lift the S&P 500.
Thursday's moves came after the release of a better-than-expected reading on U.S. weekly jobless claims. The number of first-time unemployment-benefits filers totaled 787,000 for the week ending Dec. 26, the Labor Department said Thursday. Economists polled by Dow Jones were expecting a print of 828,000.
"Although the improvement does not fit with the narrative of intensifying COVID restrictions ... we have to take it at face value," wrote Thomas Simons, money market economist at Jefferies. "As far as next weeks' payrolls, they are still likely to be very weak given that initial claims increased between the Dec and Nov survey weeks, and continuing claims posted their smallest decline since June."
Equities fell sharply in February and March as the Covid-19 pandemic spread outside of China and forced countries into lockdowns that grinded economic activity to a halt. The S&P 500 suffered its most rapid 30% drawdown on record.
But after bottoming out in late March, and amid massive action by the Federal Reserve to shore up the credit markets, stocks rebounded dramatically and have ripped off a series of record highs before the end of year. The latest moves into record territory came amid the rollout of several Covid-19 vaccines and a new economic relief package from Congress.
The tech-heavy Nasdaq Composite gained 43.6% this year, posting its best one-year performance since 2009. The S&P 500 closed 2020 with a 16.3% gain. The Dow rose 7.3% in 2020.
"To use an overused word, this has been unprecedented," said Sam Stovall, chief investment strategist at CFRA Research. "We've never had to deal with anything like this."
Those gains came amid sharp daily moves that kept even the most seasoned investors on their toes throughout the year.
The S&P 500 closed up or down at least 1% in 110 of this year's 253 trading days, compared to just 38 days in 2019. Those 110 daily swings include two rallies of more than 9% in March as well as a 12% drop in the same month.
"If Rip Van Winkle woke up today, he would say, 'what a great year; we're up 15%. You can't beat that,'" Stovall added. "Then he'd open his statements and see the S&P 500 lost 20% in the first quarter, and then rose the exact same 20% in the second quarter he'd think there was a bug in the system. He'd be right, it was Covid."
Tech was by far the dominant sector in 2020, surging more than 42% for the year, as the pandemic forced more people to work from home. This shift drove up demand for cloud services and computer equipment.
Consumer discretionary, meanwhile, jumped 32.1% this year, boosted by more people shopping online. Amazon shares skyrocketed 76.3% in 2020, while Etsy quadrupled in value.
Scott Wren, senior global market strategist at Wells Fargo Investment Institute, called 2020 a "year of opportunity."
"The stock market offered investors multiple opportunities to put sidelined funds to work in 2020," Wren wrote in a note to clients. "The good news is we expect additional opportunities to present themselves in the New Year."
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