U.S. stocks rise on economic optimism; Treasuries fall

Stocks rose toward a record on speculation the economic recovery can weather the coronavirus flareup. Bonds fell.

Stocks rose toward a record on speculation the economic recovery can weather the coronavirus flareup. Bonds fell.

Industrial and commodity companies led gains in the S&P 500. Volume was low ahead of the holidays. Electric-vehicle startup Nikola Corp. surged amid optimism about deliveries. U.S.-listed shares of JD.com Inc. sank on Tencent Holdings Ltd.’s plan to distribute more than US$16 billion of the Chinese e-commerce firm’s stock as a one-time dividend. Crocs Inc., the colorful clog maker, plunged after agreeing to buy casual-shoe brand Heydude for US$2.5 billion.

U.S. consumer sentiment increased in December as households grew more upbeat about the economy. Sales of new homes rose in November to a seven-month high, while orders for durable goods beat forecasts. Consumer spending -- adjusted for inflation -- stagnated as the fastest price gains in nearly four decades eroded purchasing power. Jobless claims were little changed last week.

Merck & Co.’s COVID-19 pill was cleared by U.S. regulators, giving high-risk patients another at-home treatment option. People with the omicron variant are 50 per cent to 70 per cent less likely to be admitted to hospital, compared with the delta strain, the U.K. Health Security Agency said Thursday. 

“We’re still in a pretty good spot for equities,” said Anu Gaggar, global investment strategist at Commonwealth. “Real rates remain low and liquidity conditions remain quite easy, household and corporate balance-sheets are healthy and consumer confidence also remains high. It is not time to head for the exits.”