ADVERTISEMENT

The Dow Jones industrial average rose, reaching an all-time closing high and headed toward its biggest annual gain since 1996, as Walt Disney Co. led a rally in consumer shares.

Walt Disney jumped 2.5 percent, the most in the Dow and the Standard & Poor’s 500 Index, after an analyst upgrade. Crocs Inc. rose 21 percent after saying its chief executive officer will retire and Blackstone Group LP will invest $200 million in convertible preferred stock in the maker of colorful plastic clogs. Twitter Inc. fell 5.1 percent, extending losses after a 13 percent drop Friday. Facebook Inc. declined 3.1 percent, retreating for the third straight trading session.

The S&P 500 fell less than 1 point to 1,841.07. The benchmark index is poised for a 29 percent increase this year, its biggest annual gain since 1997. The Dow rose 25.88 points, or 0.2 percent, to 16,504.29, extending its rally for the year to 26 percent. About 4.4 billion shares changed hands on U.S. exchanges, 28 percent below the three-month average.

“It’s a slow market right now without any dramatic news, and I don’t see much happening between now and trading through the close tomorrow,” said John Carey, a fund manager at Pioneer Investment Management, which oversees about $220 billion. “Then we’re off to the races in the new year.”

The S&P 500 has gained 2 percent in December, heading for its fourth straight monthly advance. The gauge climbed 3.7 percent from Dec. 13 through Friday, its biggest two-week rally since July, as the Federal Reserve announced plans to reduce the pace of bond buying amid faster-than-estimated economic growth. Three rounds of stimulus, known as quantitative easing, have sent the S&P 500 up 172 percent from a 12-year low in 2009.

Five years after the equity bull market started, U.S. investors returned to stocks in 2013, just in time for the best relative returns versus bonds on record.

Exchange-traded and mutual funds investing in shares took in about $162 billion, the most since 2000, according to data compiled by Bloomberg and the Investment Company Institute. At the same time, the S&P 500’s 29 percent advance has beaten government debt by 32 percentage points, the widest spread since at least 1978, according to data compiled by Bank of America Merrill Lynch and Bloomberg.

“The equity culture is not dead,” Joseph Quinlan, the chief market strategist at Bank of America Corp.’s U.S. Trust, said on Dec. 13. His firm oversees $333 billion in client assets. “We kind of lost sight of the fact that equities still provide long-term good returns.”

Equity returns will slow next year, Wall Street strategists forecast. The S&P 500 will end 2014 at 1,950, according to the average of 20 estimates compiled by Bloomberg. That represents a 5.9 percent gain over the next 12 months.

Consumer-discretionary shares had the largest advance among 10 main industries in the S&P 500, adding 0.4 percent. Walt Disney jumped 2.5 percent to a record $76.23. The world’s largest entertainment company was raised to buy from neutral by Guggenheim Securities LLC analyst Michael Morris. Morris’ 12- month target price is $87.