The s&p 500 hit a record closing high on Wednesday, with stocks rising for a third straight day on encouraging U.S. economic data and waning concerns about the financial impact of China’s coronavirus outbreak.
The dow jones industrial average rose 483.22 points, or 1.68%, to 29,290.85. The s&p 500 gained 37.1 points, or 1.13 percent, to 3,334.69. The NASDAQ closed up 40.71 points, or 0.43 percent, at 9,508.68.
The NASDAQ also hit a record closing high, but gains were limited by a plunge in Tesla shares.
The job market kicked off 2020 in an ambitious way, with the private sector adding 291,000 jobs, the biggest monthly gain since May 2015, according to a report released Wednesday by ADP and moody’s analytics.
The latest report said ADP added 291,000 jobs in January, well ahead of market expectations for a 156,000 gain, revised up from a 19,000 gain and a 202,000 gain.
Data released after the institute for supply management was also strong. U.S. service sector activity rose in January and industry reported a rise in new orders, suggesting the economy may continue to grow modestly this year despite a slowdown in consumer spending.
The ISM said its index of U.S. non-manufacturing activity rose to 55.5 in January, the highest since August last year, from a forecast of 55.0.
The s&p 500’s gains have eclipsed last week’s sharp losses after China injected liquidity into the market to contain the economic impact of the coronavirus outbreak.
“There are very few alternatives to stocks in this low-interest-rate environment, and as long as the economy shows it can survive, people will keep coming back to the [stock] market to invest,” said Cherry Lane Investments partner Rick Meckler.
“Right now, they’re more worried about missing the market than they are about selling off,” Meckler said.
Energy stocks were the best performers in the s&p 500, jumping 3.8 percent as crude oil prices rose.
Among individual stocks, health-care stocks climbed 2.0 percent, boosted by a rise in health insurance and a 17.5 percent jump in biotechnology company Biogen after it won a patent ruling on a multiple sclerosis drug.
Tesla plunged 17.2 percent after six days of steep gains after a senior executive warned that a coronavirus outbreak in China would delay deliveries of Model 3 cars made at its Shanghai plant.
With the fourth-quarter earnings season largely over, s&p 500 companies are expected to post earnings growth of 1.6 percent, according to luft IBES.
“We have had a mixed quarter, but the big companies have been surprisingly strong,” said Delore Rubin, a senior equity trader at Deutsche Bank. “as this trend continues, there is not much reason not to be in the market.”