Small-Caps Break Record, Nasdaq Hits 14-Year High.

http://www.bloomberg.com/news/2014-12-26/u-s-index-futures-gain-as-dow-above-18-000-s-p-500-near-record.html

The Russell 2000 (RTY) Index climbed to an all-time high and the Nasdaq Composite Index reached a level unseen since 2000 as an equities rally that started last week continued through one of the slowest trading days of the year.

The Russell 2000 of small-cap companies gained 0.7 percent to a record 1,215.21 at 4 p.m. in New York. The Nasdaq Composite jumped 0.7 percent to the highest level since March 2000, as biotechnology companies rebounded a second day. The Standard & Poor’s 500 Index (SPX) rose 0.3 percent to 2,088.77. The Dow Jones Industrial Average (INDU)added 23.50 points, or 0.1 percent, to 18,053.71. About 3.3 billion shares traded hands on U.S. exchanges, the second-lightest day of trading this year. The slowest was on Dec. 24, when the market closed at 1 p.m.

U.S. exchanges were closed yesterday for Christmas. Most major markets around the globe were shut today.

“We’ve had quite a run here,” Eric Cinnamond, who manages the $691 million Aston/River Road Independent Value Fund, said by phone from Louisville, Kentucky. “The consensus has been that the domestic economy is improving and small-caps are more exposed to that than large-cap multinational companies. Managers are making sure they’re owning what’s working and the herd mentality is at extremes right now.”

The Russell 2000 and Nasdaq Composite (CCMP) have shown resilience this year. The Russell recovered from a correction that saw it slip 11 percent over a five-week period starting in early September. The index has surged 16 percent since reaching a one-year low on Oct. 13.

Bouncing Back

The Nasdaq Composite closed below 4,000 twice this year, on Feb. 3 and April 11. It has rallied 20 percent since then, and is now 4.8 percent below its all-time closing high of 5,048.62, set on March 10, 2000. The Nasdaq 100 Index, which jumped 0.7 percent today, is about 20 points away from reaching a 14-year high.

Biotech Companies

Seven of 10 major groups in the S&P 500 advanced, with utilities and health-care companies jumping more than 0.8 percent. Energy shares dropped less than 0.1 percent.

Gilead Sciences Inc. added 2.7 percent as RBC Capital Markets analyst Michael Yee said the company should “aggressively” repurchase shares following an 18 percent drop earlier in the week. The drugmaker could “easily” buy $10 billion over the next year “without issues,” Yee wrote.

The Nasdaq Biotechnology Index rallied 2.3 percent, rebounding for a second day. The gauge recovered from losses earlier this year, reaching a record on Dec. 19 before this week’s volatility.

Biotech shares had slumped this week as investors fear health insurers and companies that manage patient’s drug benefits will put new pressure on how much the industry can charge for breakthrough treatments. The selloff was prompted by Express Scripts Holding Co.’s announcement that it would block its U.S. patients from getting Gilead’s $1,100-a-pill hepatitis C medicine.

Pfizer Inc. climbed 0.7 percent, and Celgene Corp. added 3.4 percent for the best performance in the S&P 500.

Internet Rally

Internet stocks also rallied today. Groupon Inc., LinkedIn Corp. and Amazon.com Inc. advanced more than 1.5 percent. The Dow Jones Internet Composite Index is still 4.6 percent below a 14-year high reached in March.

Amazon advanced as online retailers are on pace to sell more products online than ever this holiday season.

More than 10 million new customers this holiday season tried Amazon Prime, the company’s $99 annual subscription that offers delivery discounts and video streaming, Amazon said today. The service may boast more than 30 million members, Robert W. Baird analyst Colin Sebastian wrote in a note to clients.

Newmont Mining Corp. advanced 1.5 percent as gold climbed the most in more than two weeks.

Airline stocks advanced as the price of oil declined. Republic Airways Holdings Inc. paced gains in the group, adding 1.9 percent. JetBlue Airways Corp. climbed 1.2 percent.

McDonald’s Corp. led an advance in the Dow, adding 1 percent. Walt Disney (DIS) gained 0.7 percent. The shares have climbed 5.4 percent since Dec. 16. Caterpillar Inc (CAT) rose 0.5 percent, extending a seven-day rally to 5.5 percent.