(c) 2013, Bloomberg News.
(c) 2013, Bloomberg News.
NEW YORK — The Dow Jones Industrial Average rose, reaching an all-time closing high and headed toward its biggest annual gain since 1996, as Walt Disney led a rally in consumer shares.
Walt Disney jumped 2.5 percent, the most in the Dow and the Standard & Poor's 500 Index, after an analyst upgrade. Crocs rose 21 percent after saying its chief executive officer will retire and Blackstone Group will invest $200 million in convertible preferred stock in the maker of colorful plastic clogs. Twitter fell 5.1 percent, extending losses after a 13 percent drop on Friday. Facebook declined 3.1 percent, retreating for the third straight trading session.
The S&P 500 fell less than 1 point to 1,841.07 at 4 p.m. in New York. The benchmark index is poised for a 29 percent increase this year, its biggest annual gain since 1997. The Dow rose 25.88 points, or 0.2 percent, to 16,504.29 on Monday, extending its rally for the year to 26 percent. About 4.4 billion shares changed hands on U.S. exchanges, 28 percent below the three- month average.
"It's a slow market right now without any dramatic news and I don't see much happening between now and trading through the close tomorrow," John Carey, a fund manager at Pioneer Investment Management, which oversees about $220 billion, said in a telephone interview. "Then we're off to the races in the new year."
The S&P 500 has gained 2 percent in December, heading for its fourth straight monthly advance. The gauge climbed 3.7 percent from Dec. 13 through Dec. 27, its biggest two-week rally since July, as the Federal Reserve announced plans to reduce the pace of bond buying amid faster-than-estimated economic growth. Three rounds of stimulus, known as quantitative easing, have sent the S&P 500 up 172 percent from a 12-year low in 2009.
Pending home sales increased 0.2 percent, the first gain in six months, after a 1.2 percent drop in October that was larger than initially reported, the National Association of Realtors said Monday in Washington. The median projection in a Bloomberg survey of economists called for a 1 percent advance.
Five years after the equity bull market started, U.S. investors returned to stocks in 2013, just in time for the best relative returns versus bonds on record.
Exchange-traded and mutual funds investing in shares took in about $162 billion, the most since 2000, according to data compiled by Bloomberg and the Investment Company Institute. At the same time, the S&P 500's 29 percent advance has beaten government debt by 32 percentage points, the widest spread since at least 1978, according to data compiled by Bank of America Merrill Lynch and Bloomberg.
"The equity culture is not dead," Joseph Quinlan, the chief market strategist at Bank of America's U.S. Trust, said in a Dec. 13 phone interview from New York. His firm oversees $333 billion in client assets. "We kind of lost sight of the fact that equities still provide long-term good returns."
Equity returns will slow next year, Wall Street strategists forecast. The S&P 500 will end 2014 at 1,950, according to the average of 20 estimates compiled by Bloomberg. That represents a 5.9 percent gain over the next 12 months.
The Chicago Board Options Exchange Volatility Index, the gauge of S&P 500 options known as the VIX, increased 8.8 percent to 13.56 on Monday, rising for a second straight day. The gauge has dropped 25 percent this year.
Consumer-discretionary shares had the largest advance among 10 main industries in the S&P 500, adding 0.4 percent. Walt Disney jumped 2.5 percent to a record $76.23. The world's largest entertainment company was raised to buy from neutral by Guggenheim analyst Michael Morris. Morris' 12- month target price is $87.
Crocs rose 21 percent, the biggest jump since August 2009, to $16.14. CEO John McCarvel will step down on April 30. The shoemaker will use the Blackstone funds to increase stock repurchases to $350 million, Niwot, Colo.-based Crocs said.
Cooper Tire & Rubber climbed 5.4 percent to $24.20 after it dropped plans to be bought by India's Apollo Tyres, citing a lack of financing for the transaction, and said it will seek damages. Cooper said on June 12 that Apollo planned to buy the U.S. tiremaker for $35 a share in a $2.5 billion deal.
Energy producers fell 0.8 percent for the biggest decline among S&P 500 groups. Pioneer Natural Resources slid 3.1 percent to $181.70 while Tesoro decreased 1.4 percent to $56.55. Exxon Mobil lost 1.2 percent to $100.31 and Chevron slipped 0.8 percent to $124.23 from the largest drops in the Dow.
Twitter decreased 5.1 percent to $60.51. The social- networking company on Friday fell the most since it debuted on the New York Stock Exchange after Macquarie Capital downgraded the shares, saying they had risen "too far, too fast." The stock had almost tripled through Dec. 26 since its Nov. 6 IPO.
Facebook declined 3.1 percent to $53.71. Shares of the social-networking company have plunged 7.3 percent since reaching a record on Dec. 24. Facebook is poised for its biggest monthly gain since September, rallying 14 percent in December.
Myriad Genetics fell 14 percent to $20.79. Piper Jaffray. lowered its price estimate for the supplier of genetic tests to $29 from $36, citing a decision by the U.S. Centers for Medicare and Medicaid Services to reduce the reimbursement rate by about 49 percent for screening devices to help predict breast cancer risk.
All 10 main industries in the S&P 500 have advanced this year, led by a 40 percent gain in consumer-discretionary companies. Phone companies have the weakest performance, with a 6.6 percent increase.
Netflix has soared 296 percent, the biggest gain this year in the S&P 500, as the world's largest video-subscription company reported earnings that surged more than analysts forecast. Micron Technology has rallied 235 percent as the chipmaker is projected to return to a profit in the fiscal year ending in August.
Best Buy has climbed 238 percent this year, rebounding after a 49 percent drop in 2012. Urban Outfitters has the only loss among consumer-discretionary shares, dropping 5.2 percent.
Newmont Mining has plunged 51 percent this year, the biggest annual loss in the S&P 500. The price of gold has dropped 29 percent in 2013, heading for its first annual loss since 2000. Cliffs Natural Resources, the second-worst performer in the index, has lost 31 percent.
With assistance from Lu Wang and Whitney Kisling in New York and Trista Kelley in London