Stocks rise slightly on first day of 2025 despite declines from Tesla, Apple
Stocks were up slightly on Thursday in the first trading session of the new year, with hopes that the market can regain the momentum that propelled the S&P 500 to log two-straight years of annual gains above 20%.
The blue-chip Dow Jones Industrial Average traded up 63 points, or less than 0.2%. The S&P 500 and Nasdaq Composite
were up about 0.4% and 0.5%, respectively. The market averages initially saw larger increases on Thursday, with the Dow up more than 300 points at session highs, but the gains reversed in late morning trading.
Tech giant Apple weighed on the market, falling more than 2%. Tesla fell about 5% after reporting that annual deliveries declined in 2024. Chipmaker Nvidia rose 2.7%, helping to offset the declines from other Big Tech stocks.
Thursday’s trading moves come after a solid 2024 for stocks ended on a sour note. The S&P 500 surged 23%, but ended the year with four-straight down days for the first time since 1966.
That losing streak means it will be difficult for a “Santa Claus rally” to materialize. That well-known market indicator is usually characterized by rising stocks in the five final days of a calendar year and the first two trading days of January. The broad index rises an average of 1.3% during this period and has finished higher almost 80% of the time, according to Dow Jones market data going back to 1950.
The tech-heavy nature of 2024′s rally has raised some concern that the move is unsustainable, but more optimistic investors point to continued economic strength and earnings growth as reasons that the market still has room to run.
“The argument that irrational exuberance, animal spirits and bubble-like optimism were the primary drivers behind the market’s levitation seem largely inconsistent with stronger data and more subdued recession risks,” UBS strategist Jonathan Golub said in a note to clients Thursday.
“Either way, it is clear that investors are extremely optimistic as we enter 2025. Maybe this exuberance is reason for concern. Maybe 2025 will be another gangbuster year,” Golub continued.
The holiday-shortened week has been light on economic data, but a jobless claims report on Thursday showed both initial and continuing unemployment claims falling week over week.(Cay)
source: CNBC
