Dow Jumps 300 Points to Start 2020, Continuing Last Year’s Big Rally
Stocks rose to all-time highs on Thursday, led by tech shares, as the strong rally in 2019 continued in the first trading day of the new year.
TheÂ Dow Jones Industrial AverageÂ advanced 330.36 points, or 0.9% to 28,868.80 and notched its biggest one-day gain since Dec. 6. TheÂ S&P 500Â closed 0.8% higher â€”marking its best performance since Dec. 12 â€” at 3,257.85. TheÂ Nasdaq Composite gained 1.3% to end at 9,092.19 and had is best day since Oct. 11. The major averages hit their session highs in the final minutes of trading.Â
Chip stocks led the way on Wall Street.Â Advanced Micro DevicesÂ was up by 7.1% whileÂ Taiwan Semiconductor andÂ Micron TechnologyÂ both gained at least 3%.Â KLAÂ andÂ IntelÂ rose by 2.5% and 1.7%, respectively. Apple was among the best-performing Dow stocks, closing 2.3% higher and hitting $300 per share for the first time.
Semiconductor stocks are coming off a strong performance in 2019. The VanEck Vectors Semiconductor ETF (SMH) surged 62% in 2019, its best one-year performance since 2003. On Thursday, the ETF closed 2.3% higher.
â€œWeâ€™re starting the year off on the sunny side,â€ said Peter Cardillo, chief market economist at Spartan Capital Securities. â€œBesides the geopolitical tensions, the focus remains on the macro news which has been consistent and points to growth ahead.â€
Thursdayâ€™s gains come after Wall Street booked a strong 2019 performance on Tuesday, with the S&P 500 rising 28.9% in the year. That was the broad indexâ€™s biggest annual gain since 2013, when it surged 29.6%. The Dow, meanwhile, climbed 22.3% while the Nasdaq Composite skyrocketed more than 35%.
Sentiment was lifted Thursday after the Peopleâ€™s Bank of China lowered the amount of reserve cash the countryâ€™s banks must hold, which will put more money into the economy. This move will inject about 800 billion yuan in liquidity to the Chinese economy.
Chinese stocks rose broadlyÂ on the announcement, with global equity markets following them. In Europe, the German Dax rose 1% while the French CAC 40 jumped 1.1%.
â€œEquities begin  on firm ground building on the momentum from last year,â€ said Gregory Faranello, head of U.S. rates at AmeriVet Securities, in a note. But â€œitâ€™s hard to imagine 2020 offering the same type of returns of last year.â€
While global stocks are off to a good start for 2020, investors will remain tracking trade developments as well as political risks.
PresidentÂ Donald TrumpÂ said Tuesday that he will be signing a first phase trade deal with China on Jan. 15 at the White House. The president also announced that he will be going to Beijing at a later date when phase two talks begin.
On the data front, weekly jobless claims came in at 222,000, slightly below a Reuters estimate of 225,000.
– CNBC’s Silvia Amaro contributed to this reportÂ
By: Fred ImbertÂ