Stocks Close Holiday-Shortened Week Higher

(AP) -- Wall Street added to its recent string of gains Thursday, closing out a holiday-shortened week of trading with a broad stock rally that nudged the S&P 500 to an all-time high.

The S&P 500 rose 0.6%, its third straight gain. The benchmark index's latest milestone marks its 68th record high this year. It's now up 25.8% for the year with just five trading days left to go in 2021.

The Dow Jones Industrial Average rose 0.6% and the Nasdaq gained 0.8%. The Russell 2000, a measure of small-company stocks, rose 0.9%.

Stock indexes bounced back this week after posting weekly losses last week. A surge in coronavirus cases because of the omicron variant has weighed on Wall Street, adding to concerns about rising inflation and its impact on economic growth. Traders may have been encouraged by some preliminary research that suggests omicron, while spreading much faster than the delta COVID-19 variant, may cause less severe illness.

"Covid is spreading at an incredible rate, but the fact that this version just seems to be less lethal is giving people a lot of hope," said J.J. Kinahan, chief strategist with TD Ameritrade. "That's giving people real confidence going forward as we head in to 2022."

The S&P 500 rose 29.23 points to 4,725.79. The index rose 2.3% for the week. Its latest all-time high eclipsed the one it set Dec. 10.

The Dow gained 196.67 points to 35,950.56, while the Nasdaq rose 131.48 points to 15,653.37. The Russell 2000 picked up 19.67 points to 2,241.58.

Bond yields rose. The yield on the 10-year Treasury rose to 1.49% from 1.46% late Wednesday.

Wall Street is trying to gauge how corporate profits in 2022 may be affected by inflation, global supply chain disruptions and the pandemic. In the near term, the outlook is being clouded by the rapid spread of omicron. Governments in Asia and Europe have tightened travel controls or pushed back plans to relax curbs already in place.

Investors got some good news Thursday, as U.S. health regulators authorized Merck's pill to treat COVID-19. Regulators had previously cleared the way for a treatment from Pfizer.

Traders also weighed a mix of economic data. The Commerce Department reported that U.S. consumer prices rose 5.7% in November versus a year earlier, the fastest pace in 39 years, as a surge in inflation confronts Americans with the holiday shopping season under way. Businesses have been dealing with supply chain problems and higher raw materials costs, and in turn passing those costs off to consumers.

The higher prices have raised concern that consumer spending, which accounts for 70% of U.S. economic activity, could soften and hurt economic growth. The latest report shows that spending rose 0.6%, well below the 1.4% surge in October.

Meanwhile, the Labor Department reported that the number of Americans applying for unemployment benefits was unchanged last week, remaining at a historically low level that reflects the job market's strong recovery from the coronavirus recession last year.

About 80% of stocks within the benchmark S&P 500 gained ground, with technology and industrial companies accounting for a big share of the gains. Real estate and utilities stocks lagged.

Cisco systems, which makes routers and other computer hardware, rose 1.2%. Chipmaker Micron Technology rose 4.5%.

Retailers and other companies that rely on consumer spending gained ground. Tesla jumped 5.8% for the biggest gain in the S&P 500. Target rose 1.5% and Domino's Pizza rose 2.1%.

European markets were higher, and Asian markets closed higher overnight.

U.S. markets will be closed Friday in observance of Christmas.