US stocks climb, closing 2013 with best performance in 18 years

Stocks rally as consumers are more confident to spend. Buyers believing hiring will pick up into 2014.
Posted By Sonali Basak   |   Dec. 31, 2013 at 11:32 AM
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The Dow Jones Industrial Average climbed Tuesday morning amid positive economic data after closing Monday at its 51st record peak this year.

The index could close 2013 with the strongest performance in 18 years. Increased investment comes after higher-than-expected consumer confidence was reported for December. Higher home sales were also reported for October, increasing by the the highest annual margin in more than seven years.

Consumer confidence rose even as many retailers anticipated a rough holiday season, slashing prices to draw in customers.

Consumer spending accounts for 70 percent of the economy. Buying of goods such as clothing, electronics, cars and homes comes as sentiments rise of hiring picking up into 2014. Payrolls expanded in November, and unemployment fell to 7 percent - a five-year low.

The Dow is up 26 percent for the year, and the S&P 500 is up 30 percent.

The S&P has risen 173 percent after dropping to its lowest in 12 years in 2009. Though economists forecast growth will slow into 2014. Bloomberg forecast the S&P to inch only 5.7 percent next year.

Stocks were held up throughout the year partially due to the Federal Reserve's stimulus package boosting the economy with $85 trillion monthly. But mid-December, Fed leaders indicated that the stimulus would begin to scale back in January, tapering slowly as to not introduce inflationary pricing.

[Wall Street Journal] [Bloomberg] [Bloomberg]

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