US close: Stocks rise, Dow inches higher for fourth straight record close

US stocks finished higher on Monday, though gains for the Dow were only modest with the index already at record highs, as investors continued to digest mixed messages from Federal Reserve policymakers about the interest-rate outlook.

The Dow Jones Industrial Average finished just 0.86 points higher but still managed to set a new all-time high of 37,306.02, its fourth record in a row, while the Nasdaq gained 0.6% and the S&P 500 rose 0.5%

Goldman Sachs on Monday raised its forecast for the S&P 500 for next year to 5,100 from 4,700 last month. The index now just stands just 1.1% away from its record high of 4,796.56 reached in January 2022

Investor sentiment turned positive late last week after Federal Reserve chairman Jerome Powell seemingly indicated that three short-term interest rate cuts were expected to take place in 2024 amid cooling inflation. However, central bankers have come out to temper expectations that rates would be lowered anytime soon.

On Friday, New York Fed president John Williams and Atlanta Fed head Raphael Bostic both dampened growing optimism around sooner-than-expected rate cuts: Williams said it was too early for policymakers to begin thinking about lowering borrowing costs; while Bostic stated he foresees two rate cuts in 2024, but not starting until the third quarter.

In contrast, speaking on Monday, San Francisco Fed president Mary Daly said her own expectations for rates were "very close" to the dotplot graph released last week, which signalled three rate cuts in 2024. She acknowledged that the Fed would still keep financial conditions "quite restrictive even if we [cut] three times next year.”

On the macro front, the National Association of Housebuilders' housing market index edged up to 37 in December, up from an almost 12-month low of 34 in November and beating forecasts for a reading of 36. Homebuilder sentiment rose for the first time in five months, boosted by falling mortgage rates and recent economic data that seems to indicate that housing conditions have improved heading into 2024.

Meanwhile, oil prices rose on the back of rising disruption in the Red Sea as tankers and shipping companies pause shipments through the region after a series of attacks by Yemen's Houthi rebels, who are calling for a full ceasefire in Gaza. BP on Monday joined a series of companies to suspend shipments, as the price of WTI crude gained 1.7% to $72.62 a barrel.

M&A news moves US Steel and Adobe

US Steel jumped by a quarter after Japanese steelmaker Nippon Steel agreed to buy the company for around $14.1bn. Under the terms of the deal, Nippon will pay $55 per share in cash, which is a 40% premium to the closing US Steel share price on Friday.

Adobe finished higher after the software company and cloud-based design platform Figma mutually agreed to end their planned $20bn merger amid opposition from UK and EU regulators. Under the terms of the deal, Adobe will pay Figma a termination fee of $1bn.

US software giant IBM was in positive territory after announcing it is spending €2.13bn to buy two enterprise technology platforms from Software AG.

VF Corporation, the owner of apparel brands Vans, The North Face and Timberland, sunk nearly 8% after saying that it has detected "unauthorised" activity in its IT systems which has led to the loss of personal data. The incident is expected to have a "material" effect on operations until recovery efforts are completed, but it is not yet known what financial impact the attack will have.

Dow Jones - Risers

Procter & Gamble Co. (PG) $146.23 1.58%
Walmart Inc. (WMT) $154.97 1.46%
American Express Co. (AXP) $182.64 1.18%
McDonald's Corp. (MCD) $290.23 1.03%
Merck & Co. Inc. (MRK) $106.04 0.88%
Salesforce.Com Inc. (CRM) $263.82 0.85%
Verizon Communications Inc. (VZ) $37.68 0.83%
Cisco Systems Inc. (CSCO) $50.24 0.74%
Coca-Cola Co. (KO) $59.01 0.70%
JP Morgan Chase & Co. (JPM) $166.23 0.61%

Dow Jones - Fallers

Boeing Co. (BA) $260.47 -1.44%
Goldman Sachs Group Inc. (GS) $376.47 -1.06%
3M Co. (MMM) $105.89 -1.02%
Intel Corp. (INTC) $45.69 -1.02%
Home Depot Inc. (HD) $350.51 -0.99%
Unitedhealth Group Inc. (UNH) $526.15 -0.94%
Walgreens Boots Alliance, Inc. (WBA) $24.98 -0.87%
Apple Inc. (AAPL) $195.89 -0.85%
Walt Disney Co. (DIS) $92.86 -0.64%
Nike Inc. (NKE) $121.19 -0.30%

S&P 500 - Risers

Under Armour Inc. Class A (UAA) $9.06 5.29%
Under Armour, Inc. (UA) $8.59 4.82%
Nordstrom Inc. (JWN) $18.17 3.47%
Costco Wholesale Corp. (COST) $681.24 3.40%
TripAdvisor Inc. (TRIP) $19.93 3.40%
Kroger Co. (KR) $45.55 3.26%
Hasbro Inc (HAS) $51.99 3.20%
Netflix Inc. (NFLX) $486.12 2.98%
Meta Platforms Inc. (META) $344.62 2.90%
Lamb Weston Holdings, Inc. (LW) $107.35 2.89%

S&P 500 - Fallers

VF Corp. (VFC) $18.36 -7.76%
Archer-Daniels-Midland Co. (ADM) $72.48 -4.32%
M&T Bank Corp. (MTB) $137.32 -3.81%
Advance Auto Parts (AAP) $60.54 -3.48%
Foot Locker Inc. (FL) $29.47 -3.33%
Fortinet Inc. (FTNT) $56.09 -3.01%
Dollar General Corp (DG) $126.08 -3.00%
Delta Airlines Inc. (DAL) $41.12 -2.88%
United Airlines Holdings Inc (UAL) $42.33 -2.87%
Blackrock Inc. (BLK) $795.93 -2.82%

Nasdaq 100 - Risers

Vodafone Group Plc ADS (VOD) $8.49 3.98%
Costco Wholesale Corp. (COST) $681.24 3.40%
Hasbro Inc (HAS) $51.99 3.20%
Netflix Inc. (NFLX) $486.12 2.98%
Meta Platforms Inc. (META) $344.62 2.90%
Amazon.Com Inc. (AMZN) $154.07 2.73%
Align Technology Inc. (ALGN) $261.81 2.67%
Alphabet Inc. Class C (GOOG) $137.19 2.50%
Adobe Systems Inc. (ADBE) $599.13 2.47%
Nvidia Corp. (NVDA) $500.77 2.43%

Nasdaq 100 - Fallers

Qurate Retail Inc. (QRTEA) $0.91 -4.52%
Sirius XM Holdings Inc (SIRI) $5.23 -3.15%
JD.com, Inc. (JD) $26.64 -2.81%
Incyte Corp. (INCY) $60.64 -2.66%
Analog Devices Inc. (ADI) $196.59 -2.14%
J.B. Hunt Transport Services Inc. (JBHT) $198.46 -1.86%
Liberty Global plc Series A (LBTYA) $15.74 -1.75%
American Airlines Group (AAL) $14.24 -1.73%
Baidu Inc. (BIDU) $112.25 -1.64%
Liberty Global plc Series C (LBTYK) $16.54 -1.55%