Stock Market Today: New Record High Within Reach for S&P 500

Volume continues to taper off ahead of the long holiday weekend. As a reminder, both the stock and bond markets will be closed Monday for New Year's Day. Today, though, market participants who stuck around were watching the S&P 500 as it closed in on a new all-time high.  

In intraday trading, the S&P 500 climbed as high as 4,793.30, a stone's throw away from its all-time closing high of 4,796.56 from January 3, 2022. The broad-market index finished just below here, at 4,783, up 0.04% on the day. 

The blue chip Dow Jones Industrial Average, meanwhile, rose 0.1% to 37,710 – a new record closing high – while the tech-heavy Nasdaq Composite slipped 0.03% to 15,095. The Nasdaq remains about 6% below its all-time closing high of 16,057.44 from November 19, 2021.

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Today's gains add to this year's Santa Claus rally, a period encompassing the last five trading days of December and the first two trading days in January when stocks historically do well. 

"[T]hese 7 days are more likely to be higher than any other 7 days of the year, [with the S&P 500] up 79.5% of the time," writes Ryan Detrick, chief market strategist at Carson Group, on X. The data Detrick cites goes back to 1950, and shows the S&P 500 has averaged a 1.3% gain over the seven-day time frame. 

Since its close on Thursday, December 21 – the start of this year's Santa Claus rally – the S&P 500 is up 0.8%.

Jobless claims edge higher

Thursday saw the busiest day for economic data this week. Most notably, a report from the Labor Department showed initial jobless claims rose 2,000 last week to 205,000.

"Jobless claims increased during the week ending December 23, but overall, they continue to trend sideways and have yet to show the sustained weakness that the Federal Reserve would like to see," says Eugenio Alemán, chief economist at Raymond James. "The labor market remains strong and reinforces our view that the Fed is likely to hold rates at current levels until the second half of 2024."

More jobs data rolls in next week, including Friday's release of the December nonfarm payrolls report.

Microsoft can rally another 20%, analyst says

In single-stock news, Microsoft (MSFT, +0.3%) edged higher after Wedbush analyst Daniel Ives said it remains a "best ideas" pick. Ives also raised his price target on the mega-cap stock to $450 from $425, representing an implied upside of 20% to current levels. 

The increased price target reflects "incrementally bullish recent AI [artificial intelligence] customer checks with 'game changing' Co-Pilot monetization now on the doorstep for MSFT into 2024," Ives writes in a note to clients. "We believe the stock still has yet to price in what we view as the next wave of cloud and AI growth coming to the Redmond story with fiscal with a strong competitive cloud edge vs Amazon and Google."

MSFT is set to close out 2023 up 57%, but it's only the third-best Dow Jones stock on the year. In first place is Salesforce (CRM, -0.4%) with its 101% gain and Intel (INTC, -0.7%) comes in a close second, up 91%.

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