The Dow Jones Industrial Average (INDEXDJX:.DJI), S&P 500 (INDEXSP:.INX) and NASDAQ Composite (INDEXNASDAQ:.IXIC) all closed at records on Thursday, the first time since December 31, 1999 that the indices hit new highs on the same day. Rising oil prices and better than expected earnings reported by retailers supported the stock gains.
How the major indices moved
The blue-chip index Dow rallied up 0.6% to close the day at 18613.52. The broader S&P 500 rose 0.5% to close at 2185.79. On its part, the tech-weighted NASDAQ gained 0.5% to 5228.40.
The S&P 500 sank to its lowest level this year on February 11, but the index has rebounded almost 20% from that bottom if you include Thursday’s gains.
So far in 2016, the Dow has risen 6.8%, the S&P is up 6.9% and the NASDAQ has soared 4.4%.
“The last time we’ve seen levels like this consistently was in 2013, which went on to be one of the best years for stocks,” remarked Frank Cappelleri of Instinet LLC.
The S&P 500 gained 30% in 2013.
What are the catalysts?
Thursday’s rally drew support from the turnaround in U.S. crude oil prices after a dip caused by a report that showed oil inventory increased last week and news that Saudi Arabia is pumping out more oil. U.S. oil prices surged 4.3% to trade at $43.49 a barrel on Thursday, making its largest session gain last seen on July 12. Oil gained following a report by the International Energy Agency that said oversupply risk in the global oil market is waning.
The rising oil prices lifted energy stocks in the S&P 500, with the sector gaining 1.3%.
Favorable retail earnings
The other catalysts in Thursday’s stock gains were favorable retail earnings. Shares of Macy’s Inc (NYSE:M) gained 17% after the retailer posted exceeding sales and announced plans to close some 100 stores. A surprise in increase in profits at Kohl’s Corporation (NYSE:KSS) lifted the stock 16% and added to the gains of consumer-discretionary stocks in the S&P 500.
Can the rally continue?
Some analysts say that investors are buying stock just for lack of better alternatives. But others say that the rally could just be beginning as investors returning from summer vacation would be pulling their cash from the sidelines and putting them in stocks.