MARKET SNAPSHOT: U.S. Stocks Inch Higher As Santa Stays Jolly

By Anora Mahmudova and Carla Mozee, MarketWatch

Weekly jobless claims drop to lowest level in 7 weeks

NEW YORK (MarketWatch) -- U.S. stocks edged higher on Wednesday, building on five straight days of advances that have sent both the S&P 500 and Dow industrials to record levels.

The day's gains for the S&P 500 (SPX) and the Dow Jones Industrial Average (DJI) were driven by the utilities and health-care sectors, while a fresh selloff in energy stocks limited gains.

But even the smallest increase would give the two benchmarks fresh closing records. On Tuesday, the Dow closed above 18,000 for the first time, in the fifth-fastest 1,000-point rise in the Dow's history.

The Nasdaq Composite (RIXF) was also in positive territory.

A steeper-than-expected drop in the weekly jobless claims, on the heels of a surprisingly strong update on third-quarter economic growth kept the mood positive on Wall Street, said Colin Cieszynski, chief market strategist at CMC Markets.

The number of people who applied for U.S. unemployment-insurance benefits fell by 9,000 to 280,000 in the week that ended Dec. 20, a seven-week low and only modestly above a 14-year low.

"Most people who are trading today would probably not want to rock the boat, and at the moment there is no reason for Santa rally to stop," he added.

Christmas Eve traditionally is one of the lightest trading days of the years. Investors will wrap up the trading day early, with both the New York Stock Exchange and the Nasdaq Stock Market closing at 1 p.m. Eastern Time. The markets will remain closed Thursday for Christmas Day, and will reopen Friday with normal hours.

The Dow at 18,000 before the end of 2014 is "extremely encouraging", considering the "January Effect" which is the theory that "markets will rally even more when we get in to 2015, as investors pile back in to the equity market," said Neal Gilbert, senior market analyst, at Forex.com, in a Tuesday note.

The Dow reaching 20,000 by February may be a stretch, but not entirely out of reach, said Gilbert.

"As bold as I'd like to get, the daily trend-line resistance indicates that 20,000 won't be achieved until late [third quarter of 2015], so we may have a little time to wait before we start breaking out our Jules Verne-themed balloons," he wrote.

Oil: At 10:30 a.m. Eastern Time, the Energy Information Administration is expected to report a drawdown of 2.4 million barrels from U.S. crude-oil inventories for the week ended Dec. 19, according to a Platts survey. If the EIA reports a decline in oil stocks, that would be in contrast to late Tuesday data from the American Petroleum Institute, which showed crude inventories rose 5.4 million barrels last week.

Oil prices, which have been volatile in recent weeks on oversupply concerns, moved lower on Wednesday. West Texas Intermediate crude futures for February delivery (CLG5) fell more than 2%, to below $56 a barrel. Brent crude futures also dropped more than 2%, to $60.13 a barrel.

Stocks to watch: Biotech stocks were rebounding after a harsh selloff on Tuesday. Celgene Corp (CELG) and Gilead Sciences (GILD) were the top gainers on the S&P 500.

Energy companies were hits once more, as crude-oil prices resumed their decline. Nabors Industries Ltd.(NBR) and Transocean Ltd.(RIG) were among the top decliners, falling more than 3%.

GoPro Inc.(GPRO) climbed for a second day following the end of a 180-day lockup period late Monday.

Shares of Cal-Maine Foods Inc.(CALM) shares dropped sharply after the company reported disappointing results for its fiscal second quarter on Tuesday.

Other markets: In Asia, Japan's Nikkei Average rose 1.2%, while Hong Kong's Hang Seng Index ended up a more modest 0.1%. European stock markets ended mixed ahead of the Christmas break. Gold futures (GCG5) fell $3.60 to $1,174.4 an ounce.

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