Stock market heading to best Dec. in 20 years

Photo by: Richard Drew

ASSOCIATED PRESS

Photo

In this Dec. 2, 2010 file photo, Andrew O'Connor, second left, works with fellow traders on the floor of the New York Stock Exchange.

Associated Press

NEW YORK

Stocks finished higher Wednesday as the market continued on pace for its best December in nearly twenty years.

The Standard and Poor’s 500-stock index - the market measure used by most professional investors - has gained 6.7 percent this month. If it closes Friday at this level or higher, it will be the best December return for the index since 1991.

Trading continued to be thin ahead of the New Year’s holiday. In the absence of any fresh economic data or major corporate news, investors were attracted to the government’s latest bond auction. Treasury bonds rallied and stocks also drew strength from the successful sale. Traders’ moods also appear to be buoyed by the mostly positive economic news of recent weeks.

Strong corporate profits have helped push stocks higher for much of 2010.

“The primary theme of 2010 was that corporate profits were much better than expected,” said Philip Dow, director of equity strategy at RBC Wealth Management in Minneapolis.

“As we enter into 2011, my hope and belief is that we move from recovery to expansion and a self-sustaining economy.”

Stocks rose across the market, with eight of the 10 industry groups in the S&P index posting gains.

Stock trading volumes on Wall Street are expected to be light throughout this week. Many investors have already closed their books for the year and are on vacation until January.

Trading volume totaled just 2.3 billion shares on the New York Stock Exchange.