The pause for stocks came as Treasury yields continued their upward climb, and the 10-year yield. Banks rose. The Standard & Poor's 500 was on pace for its first loss of 2018. The loss snapped the index's longest winning streak to start a year since 2010.
FOLLOWING THE MOMENTUM: Stocks have been steadily rising for more than a year as investors bask in an economy where countries around the world are finally all growing in sync. "I think this is going to be a better year for traders because you're going to get some volatility". The rise in rates moderated as the day progressed.
The gains for indexes marked a return to calm, after a whiff of nervousness wafted through markets a day earlier as interest rates rose. They make borrowing easier for companies and people, which greases the skids for economic growth. That makes dividend-paying stocks less attractive relative to bonds for investors seeking income.
Investors have always been preparing for a gradual increase in bond yields, and Hartman said stocks can keep climbing as long as rates do rise at a measured pace. The worry is that a surprise spike in inflation would force central banks to move more quickly on rates than investors expect and upset markets.
Amazon rose 1.8 percent and provided the biggest boost to the S&P and the Nasdaq.
Bond prices fell. The 10-year Treasury yield rose to 2.59 percent.
The rise in rates sent companies that pay big dividends to the biggest losses.
High-dividend stocks like real estate companies, utilities and makers of consumer products fell.
Strategists at Goldman Sachs say the tax overhaul will contribute more than a third of the expected 14 percent growth they're forecasting for S&P 500 earnings per share.
The Nasdaq composite rose 49.28, or 0.7 percent, to 7,261.06.
The S&P 500 is up 112.63 points, or 4.2 percent. It credited stronger demand and fares.
On the economic front, US import prices ticked up 0.1 percent in December, the Labor Department reported Wednesday, following a 0.8-percent rise the previous month.
Retailers led the way after a government report confirmed that the holiday shopping season was a strong one, with retail sales rising 0.4 percent last month following a 0.9 percent surge in November.
The Russell 2000 is up 56.46 points, or 3.7 percent. On the Nasdaq, 1,864 issues rose and 920 fell.
COMMODITIES: Benchmark U.S. crude oil rose 24 cents to $61.97 per barrel. Brent crude, the global standard, rose $1.04 to settle at $68.82 per barrel.
Bank stocks were helped by a rise in Treasury yields after underlying US consumer prices for December posted the biggest gain in 11 months, signaling a pickup in inflation.
The Dow Jones industrial average lost 19 points, or 0.1 percent, to 25,366.
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