NEW YORK (AP) — The stock market continued its upward climb Thursday as traders went back to work after the Christmas holiday, adding to what has already been a historic year for the market.
Traders were encouraged by an unexpectedly large drop in claims for unemployment benefits last week, the latest sign that the U.S. job market is improving. Trading volume was very low, however, as most portfolio managers have closed out their positions for the year
The yield on the 10-year Treasury note, a benchmark for many kinds of loans, briefly crossed above the psychologically important 3 percent mark. It hasn't been that high since September.
The Dow Jones industrial average rose 122.33 points, or 0.8 percent, to 16,479.88. It was the 50th record high close for the Dow this year. The index is up 25.8 percent so far in 2013, on pace to have its best year since 1996.
The Standard & Poor's 500 index rose 8.70 points, or 0.5 percent, to 1,842.02 and the Nasdaq composite was up 11.76 points, or 0.3 percent, to 4,167.18. With Thursday's gains, the S&P 500 is up 29.2 percent for the year, or 31.3 percent when dividends are included. The S&P is on track for its best year since 1997.
Bond prices fell, pushing the yield on the 10-year Treasury note to 2.99 percent from 2.98 percent Tuesday. The note briefly traded above 3 percent.
Yields have been climbing since late November as economic reports have suggested that the U.S. recovery is gaining momentum. The increase accelerated last week after the Federal Reserve announced it was cutting back on its bond-buying program. The yield last touched 3 percent in September. It hasn't been consistently above 3 percent since July 2011.
"There's a silver lining to see bond yields rise like this, because it's a sign that the economy is getting stronger," said John De Clue, chief investment officer of U.S. Bank Wealth Management.