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Stock market news: December 17, 2019

The S&P 500 hit a fresh record intraday and closing high Tuesday as a stock rally continued for a fifth straight session. Each of the Dow and Nasdaq each also hit record closing highs.

Here’s where markets settled Tuesday at the end of regular equity trading:

  • S&P 500 (^GSPC): +0.03%, or 1.07 points

  • Dow (^DJI): +0.11%, or 31.27 points

  • Nasdaq (^IXIC): +0.1%, or 9.13 points

  • 10-year Treasury yield (^TNX): -1.1 bps to 1.878%

  • Gold (GC=F): -0.00% to $1,480.50 per ounce

Boeing (BA) shares recovered Tuesday afternoon and touched positive territory after the plane-maker announced it would be indefinitely suspending production of the 737 Max. The aircraft has been grounded globally since March after being involved in two deadly plane crashes.

The announcement triggered declines in shares of Boeing’s suppliers including Spirit AeroSystems Holdings (SPR), Safran (SAF.PA) and Rolls-Royce (RR.L). Southwest (LUV) – the largest domestic carrier of Boeing aircraft – said Tuesday it would be removing the Boeing 737 Max from its schedule until mid-April.

Overseas, concerns reignited that the U.K. would crash out of the EU without cleanly defined trade terms, contributing to a pause in this week’s risk rally. The U.K.’s FTSE 250 (^FTSE) receded from its Monday record high to trade more than 1% lower in intraday trading Tuesday.

Prime Minister Boris Johnson is poised to add a revision to his Brexit bill to block any extension to the withdrawal transition period beyond December 2020, according to British media reports. This would mean the U.K. and EU would need to negotiate a new trade deal in a less than 12-month period – a window many analysts feel would be insufficient – with the U.K. already set to depart the EU by January 31.

The British pound slumped following the reports, falling more than 1% against the U.S. dollar (GBPUSD=X) to below $1.32 Tuesday morning in New York. At the lows of the session, the pound dropped by the most since July, bringing sterling back below levels from before Johnson’s major Conservative party win in the U.K. general elections.

“GBP’s honeymoon was cut short, with many focused on the news that the government wants to add a new clause to [the] Withdrawal Bill,” Mark McCormick, global head of FX strategy for TD Securities, wrote in a note Tuesday. “We think the market has overreacted to the headlines but still think the GBP’s rally looks overdone. It’s a classic buy the rumor, sell the fact trade coupled with stretched positioning.”

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Traders work on the floor at the New York Stock Exchange (NYSE) in New York, U.S., December 9, 2019. REUTERS/Brendan McDermid

Separately, investors continued to monitor for details of the phase one trade agreement between the U.S. and China, which is poised to be signed in early January. One point of fuzziness has been whether China would manage to increase U.S. agricultural purchases by $200 billion over the next two years as U.S. officials have touted. A Bloomberg report Tuesday suggested China could restart buying ethanol to help it boost purchases and is considering re-routing trade from Hong Kong to mainland ports.

ECONOMY: New homebuilding tops expectations in November

New home construction rose at a faster than expected pace in November, the Census Bureau said Tuesday, in another sign of a firming domestic housing market.

Housing starts increased by a seasonally adjusted annual pace of 1.365 million during the month, well above the upwardly revised 1.323 million from October.

Consensus economists had expected housing starts to rise to a seasonally adjusted rate of just 1.345 million, according to Bloomberg consensus data.

Building permits, a proxy for future homebuilding, unexpectedly picked up during November to a more than 12-year high. These rose to a seasonally adjusted rate of 1.482 million in November, from an unrevised 1.461 million during the prior month. Consensus economists expected a rate of 1.41 million building permits in November.

Industrial production rose 1.1% in November, increasing more than expected and reversing October’s decline of 0.9%, the Federal Reserve said Tuesday. The increase in production topped consensus economist expectations for a 0.9% rise. Manufacturing production also rose 1.1% in November, beating expectations for a 0.8% increase.

The Federal Reserve said the sharp November increases “were largely due to a bounceback in the output of motor vehicles and parts following the end of a strike at a major manufacturer.” The Fed’s November report coincided with the return to work of tens of thousands of General Motors employees after a United Auto Workers strike ended in mid-October.

Even excluding the impact of the strike, however, the industrial production report showed an underlying gain in manufacturing sector output. Excluding autos, manufacturing output still rose by 0.3% on a monthly basis, marking the first increase in three months.

Splitting up has been the predominant trend of the past 10 years.

Emily McCormick is a reporter for Yahoo Finance. Follow her on Twitter: @emily_mcck

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