By Mark DeCambre and Victor Reklaitis, MarketWatch

Nasdaq touches first record since Nov. 29, joining S&P 500, Dow

U.S. stocks on Thursday touched fresh record levels intraday after the European Central Bank held its key rates steady but said it would taper its asset-purchase plan in April, while leaving the door open for an extension of its economic stimulus program "if necessary."

Early trading has been choppy as equity investors attempt to extend a multisession stock advance, which has been underpinned by Donald Trump's election win a month ago. Wall Street is hopeful that the Trump administration will offer policies that stimulate economic growth and are bullish for equities.

Against that backdrop, stock investors have been mostly bullish about the outlook for equities.

The Nasdaq Composite Index hit an all-time intraday trading high of 5,419.68, joining the other main trading benchmarks which notched trading records Wednesday. The tech-laden index hit its first record since Nov. 29 and was most recently up 15 points, or 0.3% at 5,408 most recently.

The Dow Jones Industrial Average was up 16 points, or 0.1%, at 19,561, but briefly set an all-time trading high of 19,592.95, led by sharp gains in banks including J.P. Morgan Chase & Co. (JPM) and Goldman Sachs Group(GS).

The S&P 500 index also set an intraday record of 2,244.06, but most recently was trading at break-even levels, with 6 of the S&P 500's 11 sectors trading in positive territory, led by gains in tech and materials shares.

Meanwhile, the small-cap Russell 2000 index also touched a intraday high of 1,374.64 on Thursday and was trading around those levels, up 0.8%.

Doug Cote, chief market strategist at Voya Investment Management, said Thursday's moves represent a belief that Trump will follow through with pro-growth policies he campaigned on. "The market has rallied very strongly and is pricing in very quickly the positive pro-growth policies of Trump," he said. Cote said his price target for 2016 was 2250.

The early muted tone for markets was set by the ECB meeting.

"I think the biggest headline in the market is the ECB because it looks like they are taking their foot off the accelerator," said Jack Ablin, chief investment officer, at BMO Private Bank, He said hope that the ECB would continue its stimulus program at full tilt partially influenced Wednesday's rally. Signs that the ECB may be scaling back now can be viewed as a negative for U.S. markets because the ECB has been a big purchaser of U.S. assets, he said.

"I argue that the ECB has more influence over the S&P 500 than the [Federal Reserve]," Ablin said.

The ECB said it would in April cut its asset-purchase program to buying EUR60 billion ($64 billion) in bonds each month from EUR80 billion until the end of December 2017, "or beyond, if necessary, and in any case until the Governing Council sees a sustained adjustment in the path of inflation consistent with its inflation aim." The ECB's targets inflation of near 2%.

Over the longer-term, the ECB's decisions may be viewed as bullish to some because it implies healthier economies in Europe, which are big trading partners with U.S. companies.

"At this point in the cycle tapering is viewed as a good thing because it is seen as a sign of improvement," said Colin Cieszynski, chief market strategist at CMC Markets, told MarketWatch. He said volatility is likely as investors digest the news.

One area of volatility for the market on Thursday was in currencies.

The euro dropped precipitously against the dollar after an early pop higher as the bounce from the ECB decision faded. The euro rose 0.7% to $1.0874, its highest level since Nov. 14. But it soon turned lower (http://www.marketwatch.com/story/dollar-buying-takes-a-breather-as-investors-look-ahead-to-central-bank-meetings-2016-12-08), falling more than 1.5% to $1.0607.

Conversely, the U.S. dollar, as gauged by the ICE U.S. Dollar Index, a measure of the greenback against half a dozen currencies, was up 1% at 101.21, hovering around its 13-year highs. A stronger dollar can serve as a drag for the domestic economy, eroding revenue for companies selling products abroad.

"If President-elect Trump is trying to bolster economic growth by improving the balance of trade toward exports then a stronger dollar is just an additional headwind," Ablin said.

On Wednesday, the Dow and S&P 500 closed higher by 1.6% and 1.3%, respectively, as each gauge scored a record close (http://www.marketwatch.com/story/dow-industrials-aim-for-fresh-all-time-high-2016-12-07). The Nasdaq climbed 1.1%, finishing 0.1% shy of its all-time closing high, achieved in late November.

Individual movers: Shares in Lululemon Athletica Inc.(LULU) soared 18%. The Canadian seller of athletic apparel late Wednesday posted better-than-expected earnings (http://www.marketwatch.com/story/lululemon-jumps-on-strong-earnings-new-buyback-plan-2016-12-07) and announced a new buyback plan.

Costco Wholesale Corp.(COST) declined 2.7% after the warehouse club chain reported stronger-than-anticipated earnings (http://www.marketwatch.com/story/costco-same-store-sales-rise-following-declines-2016-12-07) late Wednesday.

Home builder Hovnanian Enterprises Inc.(HOV) fell 4.1% after disappointing quarterly results from the home builder

Economic news: A report on U.S. weekly on employment showed that jobless claims dropped by 10,000 to 258,000, matching forecasts and extending a streak of claims below 300,000. The report continues a trend that points to a healthy labor market.

See:Italy put a cloud over Europe, but there is a silver lining for the ECB (http://www.marketwatch.com/story/how-italys-no-vote-might-be-the-ecbs-silver-lining-2016-12-05)

The Federal Reserve entered the so-called blackout period Tuesday ahead of its meeting Dec. 13-14, so there are no Fed speakers on the docket.

Check out:

Other markets:Oil futures (http://www.marketwatch.com/story/oil-prices-stabilize-as-investors-watch-for-china-data-2016-12-08) traded higher, erasing some of this week's decline. European stocks (http://www.marketwatch.com/story/european-stocks-edge-higher-as-ecb-decision-looms-2016-12-08) have been trading higher, while Asian markets closed mostly higher (http://www.marketwatch.com/story/asian-markets-catch-a-ride-on-wall-streets-record-wave-2016-12-07). Gold futures were dropping, and a key dollar index was ticking higher.

 

(END) Dow Jones Newswires

December 08, 2016 11:36 ET (16:36 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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