Dow, S&P 500 close at record highs

NEW YORK - U.S. indexes surged to all-time highs on Wednesday, notching the market’s biggest gain since early November.

Investors are buying stocks that do well in times of faster economic growth, like technology and industrial companies, but they’re also snapping up stocks that pay large dividends. Drug companies are taking steep losses after President-elect Donald Trump said he wants to reduce drug prices.

The Dow surged 298 points, or 1.6 percent, to close at 19,549. The Standard & Poor’s 500 index climbed 29 points, or 1.3 percent, to 2,241. The Nasdaq composite gained 61 points, or 1.1 percent, to 5,395.

Those were record high closes for the Dow and S&P 500.

Transportation stocks reached all-time highs, which hasn’t happened in two years. Julian Emanuel, an equity strategist for UBS, said investors were pleased to see that record because they see it as a sign businesses will start spending more, which would bolster economic growth.

“The consumer has really been the engine of the economy,” he said. “The missing piece has been the corporate side, the industrial side.”

The Dow closed also closed at a record high on Tuesday, as did the Russell 2000, an index of smaller companies. The Russell recovered from an early loss to gain 9 points, or 0.7 percent. The S&P 500 set its latest record on Nov. 25.

Companies that stand to benefit from faster economic growth saw their stocks climb. Home improvement retailer Lowe’s rose $3.61, or 5 percent, to $76.07 and truck maker Paccar jumped $3.47, or 5.4 percent, to $67.90. Technology companies also outperformed the market. IBM rose $4.33, or 2.7 percent, to $164.68 and hard drive maker Western Digital climbed $5.64, or 8.8 percent, to $69.49 after it extended a patient licensing deal with Samsung.

By contrast, pharmaceutical firms took a hit after Mr. Trump was cited in an article in Time magazine saying that he wants to reduce drug prices. He did not say how his administration plans to do that. Democratic nominee Hillary Clinton campaigned on reducing drug prices, and drug company stocks had rallied since the election as investors felt that was less likely to happen under Trump.

The Nasdaq biotechnology index tumbled 2.7 percent, as those companies make costly medications and might stand to lose the most under tighter price regulations. Amgen lost $4.17, or 2.7 percent, to $140.94 and Vertex Pharmaceuticals sank $2.62, or 3.4 percent, to $75.50.

Bond yields have risen sharply this year but have slipped in the last few days. That’s helped stocks that are seen as bond substitutes, like real estate investment trusts. Their big dividends are attractive to investors who want income, so when bond yields fall, investors often turn to those stocks. Industrial real estate company Prologis rose $1.62, or 3.2 percent, to $52.32 and electricity and natural gas company Exelon added 44 cents, or 1.3 percent, to $33.49.

Benchmark U.S. crude lost $1.16, or 2.3 percent, to $49.77 a barrel in New York. Brent crude, the international standard, slid 93 cents, or 1.7 percent, to $53 a barrel in London.

The dollar slipped to 113.71 yen from 114.05 yen. The euro rose to $1.0753 from $1.0715.

Wholesale gasoline lost 3 cents to $1.51 per gallon. Heating oil slipped 2 cents to $1.62 a gallon. Natural gas fell 3 cents to $3.60 per 1,000 cubic feet.

Gold rose $7.40 to $1,177.50 an ounce. Silver jumped 47 cents to $17.28 an ounce. Copper dipped 4 cents to $2.64 a pound.