U.S. stocks extended their rally into the new year, with all three major indexes hitting record highs on Jan. 2, as fresh stimulus from Beijing to prop up its economy added to optimism fueled by easing trade tensions and an improving global outlook.
China’s central bank said on Wednesday it would cut the amount of cash that all banks must hold as reserves, the eighth such cut since early 2018, injecting fresh stimulus into the economy, while also boosting global markets.
The Dow was on track for its biggest percentage gain in three weeks, while the S&P 500 hit its 11th intraday record high in 14 sessions.
Wall Street closed higher on Tuesday after President Donald Trump said an initial U.S.-China trade pact would be signed on Jan. 15. Trump also said he would later travel to Beijing to begin talks on the next phase.
“In general, there isn’t a lot of negativity among investors,” said Rick Meckler, partner at Cherry Lane Investments, New Vernon, New Jersey.
U.S. presidential elections will take center stage as the year progresses but, for now, there is no major reason for investors to sell stocks, Meckler said.
At 12:41 p.m. ET, the Dow Jones Industrial Average was up 206.03 points, or 0.72 percent, at 28,744.47, the S&P 500 was up 13.30 points, or 0.41 percent, at 3,244.08. The Nasdaq Composite was up 70.33 points, or 0.78 percent, at 9,042.93.
Both the S&P 500 and the Nasdaq closed 2019 with their biggest annual percentage gains since 2013, while the Dow notched its biggest yearly percentage gain since 2017.