US close: Traders return from Christmas break in positive mood

dl nyse new york stock exchange new york city nyc wall street wall st nasdaq markets trading finance unsplash — Sharecast / David Vives via Unsplash

Wall Street stocks closed higher on Tuesday as traders returned from the Christmas break in a jolly mood.

At the close, the Dow Jones Industrial Average was up 0.43% at 37,545.33, while the S&P 500 advanced 0.42% to 4,774.75 and the Nasdaq Composite saw out the session 0.54% firmer at 15,074.57.

The Dow closed 159.36 points higher on Tuesday, extending gains recorded on Friday as market participants cheered recent a surprise reading of the Federal Reserve's favourite inflation gauge. Markets were closed for Christmas Day celebrations on Monday.

As for Tuesday, stocks started the final week of 2023 with some early gains, with Intel picking up roughly 3% as a result of the Israeli government awarding the chipmaker a $3.2bn grant for the erection of a $25.0bn plant - the largest ever investment by a company in Israel.

With Israel in mind, residents of the occupied West Bank woke up to an attack on Jenin on Christmas day, commonly viewed as a symbol of Palestinian resistance. Bethlehem, the biblical birthplace of Jesus Christ, was also raided overnight by Israeli forces as violence in the West Bank surged and arrests increased as a result of Israel's war on Gaza, which has claimed the lives of more than 20,000 Palestinians.

A bit closer to home, US home prices posted their biggest gain of 2023 in October, according to S&P/Case-Shiller, which revealed home prices rose 4.8% nationally last month - up from a 4% annual increase seen in September and the strongest annual gain of the year. Home price growth comes despite a sharp rise in mortgage interest rates in October, with the average rate on a 30-year fixed loan passing 8% on 19 October.

On another note, the Chicago Fed national activity index rose to +0.03 in November, an increase from a revised -0.66 in a month earlier. The index suggests that economic activity rose in November, with all four broad categories increasing month-on-month and two categories making positive contributions last month.

Elsewhere, former Dallas Fed president Robert Kaplan said he expects the central bank to start lowering rates soon as it looks to seeks to avoid a recession amid cooling levels of inflation.

Also from the Lone Star state, the Federal Reserve Bank of Dallas' manufacturing general business activity index deteriorated for a third straight month, hitting -19.9 in November - its lowest since July. The production index, a critical gauge of state manufacturing conditions, moved into negative territory, falling to -7.2 in November, from +5.2 in the prior month.

Reporting by Iain Gilbert at Sharecast.com

Dow Jones - Risers

Intel Corp. (INTC) $50.50 5.21%
Caterpillar Inc. (CAT) $295.63 1.81%
3M Co. (MMM) $108.11 1.67%
Walgreens Boots Alliance, Inc. (WBA) $26.60 1.47%
Dow Chemical Co. (DOW) $55.71 1.07%
Boeing Co. (BA) $262.79 0.90%
Chevron Corp. (CVX) $152.41 0.90%
Travelers Company Inc. (TRV) $187.07 0.69%
International Business Machines Corporation (CDI) (IBM) $163.09 0.66%
JP Morgan Chase & Co. (JPM) $168.41 0.59%