Stocks finished higher Wednesday as traders kept an eye on the S&P 500's march toward record levels.

The S&P 500 inched up 0.14% to end at 4,781.58, while the Nasdaq Composite added 0.16% to close at 15,099.18. The Dow Jones Industrial Average rose 111.19 points, or 0.3%, to finish at 37,656.52.

The Dow notched a fresh closing high, while the S&P 500 finished less than 0.5% off of its closing record of 4,796.56 set in January 2022. Along with the Dow and Nasdaq, the S&P is also enjoying an eight-week winning streak — its longest since 2017.

"The market wants to get this done before the year is out," said Sam Stovall, chief investment strategist at CFRA. "That's the overriding effort, but at the same time, once the market does set a new all-time high, it's probably vulnerable to a post-high pause."

It has been a strong year for stocks. The Dow and S&P 500 are poised to end 2023 higher by 13% and 24%, respectively. The Nasdaq Composite has jumped 44%, outperforming amid mega-cap technology's rebound and the artificial intelligence craze. The tech-heavy benchmark is also on track for its biggest one-year gain since 2003, when it surged 50%.

Stocks are in the thick of what's referred to as the "Santa Claus rally," a period comprised of the last five trading days of an ending year and first two of a new one. The S&P 500 has risen about 1.3% over this timeframe on average, according to data going back to 1950 from the Stock Trader's Almanac.

Despite the upbeat sentiment, some on Wall Street worry that the market may be overly optimistic, which could lead to disappointment if the Federal Reserve starts cutting rates later than expected, said CFRA's Stovall. Fed funds futures pricing reflects a significant probability of rate cuts as early as next March, according to CME Group's FedWatch tool.

"Expectations are very high right now," said Julie Biel, a portfolio manager and chief market strategist at Kayne Anderson Rudnick. "That always makes me nervous because I feel like that can really set you up for heartbreak. The Fed still seems very keen to not make the mistakes of the 1970s."

Elsewhere, CFRA's Stovall notes that 90% of stocks in the S&P 500 are trading above their 50-day moving average, suggesting a "bit of frothiness" in the market. Recent bullish sentiment data showing overexcitement could also put investors at risk of getting "sideswiped" by unanticipated events.

Stocks finish higher as Dow notches new high, S&P edges closer to record

Stocks finished higher on Wednesday, with the Dow Jones Industrial Average notching a fresh closing high.

The S&P 500 inched up 0.14% to end at 4,781.58, while the Nasdaq Composite added 0.16% to close at 15,099.18. The Dow rose 111.19 points, or 0.3%, to finish at 37,656.52.

— Samantha Subin

Energy stocks drag on S&P 500 this quarter

It's been a strong quarter for the S&P 500, in spite of energy stocks.

The broad index has gained more than 11% in the fourth quarter, which concludes with Friday's market close.

But energy names restricted gains, with the sector down more than 6%. It was the only of the 11 sectors on track to finish the quarter with losses.

That's somewhat offset major jumps among sectors like real estate and information technology, which have both rallied more than 15%.

Exxon Mobil lead the energy sector lower this quarter with a drop of more than 13%. Chevron was the next worst performer, shedding 10%.

A handful of energy names were able to buck the downtrend. Notably, Phillips 66 and Oneok are both on pace to add more than 11% in the quarter.

— Alex Harring

A 'momentous' deal for Chinese biotech companies, BTIG says

BTIG's Justin Zelin said AstraZeneca's acquisition of Gracell Biotechnologies, which was announced on Tuesday, was "momentous," as it marked the first time a large multinational pharma company acquired a Chinese biotech firm. He sees the move as "bullish for Chinese biotech companies broadly."

"Despite recent volatility in Chinese biotech stocks, we continue to see promise in the innovation engine for China biotech, especially in cell therapies," he said. Zelin called out buy-rated Legend as an example of a company that could benefit if this becomes a bigger trend.

In midday trading, AstraZeneca shares were up more than 1%, while Gracell shares were flat. Legend shares slipped more than 1%, but the stock has gained 17% year to date.

Most analysts are bullish on Legend stock, with an average upside of 48% predicted, according to LSEG.

—Christina Cheddar Berk

Oil falls nearly 2% despite Red Sea worries

Oil prices pulled back on Wednesday after jumping earlier in the week amid concerns about disruptions to Red Sea shipping from attacks by militants in Yemen.

U.S. crude fell $1.46, or 1.93%, to settle at $74.11 a barrel, while global benchmark Brent declined $1.42, or 1.75%, to settle at $79.65.

The pull back comes after prices jumped more than 2% on Tuesday after Houthi militants claimed responsibility for a missile attack on a container vessel.

Repeated attacks by the militants in the Red Sea have raised concerns that global shipping could be disrupted, potentially impacting oil supplies. Those worries seemed to ease somewhat after Maersk and France's CMA CGM said they would resume shipping.

The U.S. is leading an international task force to protect Red Sea traffic.

— Spencer Kimball

Fundstrat expects ongoing rally into year end, remains 'constructive' on 2024

Fundstrat's Tom Lee is bracing for continued upward momentum in stocks into the end of the year, and sees a "constructive" setup in 2024.

'We lean that markets will rally into YE, given the strength of December already (up +5%)," wrote the head of research in a note to clients. "Given the trailing performance of fund managers, and the notion of "never short a dull market," we see the drift higher into the final days of 2023."

Looking ahead, the firm also believes that stocks and the S&P 500 sit at attractive valuations on a price-to-earnings basis.

Lee highlighted fInancials as the firm's favorite large cap pick with a good risk-reward. Meanwhile, small caps sit at lows on a price-to-book basis, which could set them up for a 12-year cycle of outperformance, he wrote.

"We remain constructive into 2024," Lee wrote, noting that the first half may have some bumps. "While some complain valuations are expensive, this argument is a shallow view of the reality."

— Samantha Subin

Fed may have to change tone if inflation challenges path, Apollo economist says

The Federal Reserve may have to shift to more pessimistic language and hold off on lowering interest rates if inflation remains stickier than hoped for, according to Torsten Sløk, chief economist at Apollo Global Management.

"We're simply not done fighting inflation," he said on CNBC's "Money Movers." "And if we're not done fighting inflation, it means that all the negative consequences of fighting inflation — namely higher rates, higher cost of capital — will continue to linger."

Housing could cause stickiness in inflation, Sløk said, complicating the path to 2% price growth for monetary policy makers. He said the market may be "getting ahead of itself" in expect six cuts to interest rates next year, noting he anticipates just three decreases.

And the "pendulum" of commentary from the Fed could swing from dovish to a more hawkish direction, he said.

— Alex Harring

S&P 500 stocks notch record highs

Several stocks in the S&P 500 hit all-time highs on Thursday. Here's the full list:

• Booking Holdings
• Marriott International
• Broadridge Financial Solutions
• Caterpillar
• Cintas
• Eaton
• General Dynamics
• Ingersoll-Rand
• Parker Hannifin
• Trane Technologies
• CDW
• KLA
• Lam Research
• Martin Marietta
• Iron Mountain
• NRG Energy

— Alex Harring, Christopher Hayes

Real estate, consumer discretionary Wednesday's best-performing S&P 500 sector

Real estate and consumer discretionary were the best-performing sectors in the S&P 500 during Wednesday's muted session.

Both sector rose about 0.4% during midday trading, with real estate led to the upside by Extra Space Storage, American Tower Corporation and UDR. All three stocks jumped about 1% each. Carmax and Tesla were the biggest consumer discretionary gainers, addin more than 2%.

Eight of the 11 major S&P sector were positive during midday trading. Consumer staples, industrials, materials added about 0.3%.

Energy and communications services were the biggest laggards, slipped about 0.2% and 0.1%, respectively.

— Samantha Subin

Stocks making the biggest moves midday

Check out the companies making headlines in midday trading. 

• Tesla — The electric vehicle maker added 1.9% after Bloomberg News reported improvements to its Model Y vehicle are coming.
• The New York Times Company — Shares jumped 1.9% after The New York Times on Wednesday filed a lawsuit against Microsoft and ChatGPT-parent OpenAI.
• NetEase — Shares of the Chinese internet company rebounded nearly 12% after China's top gaming regulator promised to "further modify and improve" fresh rules targeting excessive gaming.
• Iovance Biotherapeutics — The biotech stock plunged nearly 23% after regulators put a clinical hold on Iovance's trial of LN-145 for non-small cell lung cancer.

— Yun Li

Appeals court pauses Apple watch import ban

Apple earned a small win in its ongoing patent battle with Masimo on Wednesday, when a U.S. appeals court paused an import ban on the company's smartwatches.

Apple halted sales of its Series 9 and Ultra 2 watches earlier this month in response to an International Trade Commission order that ruled its blood oxygen sensors infringed on intellectual property from the medical technology company.

The iPhone maker filed the appeal to the U.S. Court of Appeals for the Federal Circuit on Tuesday. The ITC has until Jan. 10 to reply to the motion.

Shares were last down 0.5%.

— Kif Leswing, Samantha Subin

Amgen, Goldman Sachs lead the Dow

Amgen and Goldman Sachs rose nearly 1% each on Wednesday, contibuting to the Dow Jones Industrial Average's 50 point, or 0.1%, gain.

The 30-stock index outperformed both the Nasdaq Composite and S&P 500, which hovered near the flatline.

Caterpillar, Walmart and Honeywell International inched up 0.5% each.

— Samantha Subin

Dollar index hits lowest level since July, heads for first negative year since 2020

The dollar index declined on Wednesday to 101.312 and traded near its lowest level since July 27.

For the year, the index is down more than 2% and headed for its first negative year in three, after falling 6.7% in 2020.The dollar index is down 2% in December, and headed for its first negaitve month in three.

The index is also on track for a 4.6% quarterly decline and its worst quarterly performance since the fourth quarter of 2022.

Elsewhere, the euro is up 3.4% against the dollar in 2023 and on pace for its best year since 2020, when its jumped nearly 9%.

— Samantha Subin, Gina Francolla

Manufacturing sees decline in Richmond area, Fed survey shows

Manufacturing activity in the Virginia area retreated in December as shipments and new orders both pulled back, the Richmond Federal Reserve reported Wednesday.

The central bank district's survey of business activity in the Virginia, Delaware and North Carolina region registered a reading of -11 for the month, down from -5 in November and worse than the -6 Dow Jones estimate. The diffusion survey measures the percentage of business reporting expansion against contraction, so a negative number indicates a pullback.

Shipments declined to -17, new orders fell to -14 and the employment index edged lower to -1, from zero the prior month. On the inflation front, both price paid and received increased to 4.24 and 2.79 respectively.

—Jeff Cox

Stocks open little changed

Stocks opened little changed on Wednesday as the S&P 500 neared its all-time high.

The Nasdaq Composite added 0.2%, while the S&P hovered near the flatline. The Dow Jones Industrial Average lost 48 points.

— Samantha Subin

Natural gas hits highest level since early December, but heads for worst year since 2006

Natural gas rose more than 4% on Wednesday to hit its highest level since Dec.6. But it's still on pace for a nearly 41% year-to-date loss and its worst year since 2006.

For December, natural gas is down more than 5% and on pace for its scond consecutive losing month.

Some of the biggest natural gas laggards in 2023 include Tellurian, Comstock and Antero. All three stocks have lost more about 26% or more.

— Samantha Subin, Gina Francolla

Stocks making the biggest moves before the bell: Coherus, Netease and more

These are the stocks moving the most in premarket trading:

• Coherus BioSciences — The biopharma stock soared 34% after the FDA approved UDENYCA ONBODY, an on-body injection system that patients take in conjunction with chemotherapy to prevent infection.
• Netease — Shares of the Chinese internet company shed 4% after China's top gaming regulator promised to "further modify and improve" fresh rules targeting excessive gaming.

Read the full list of stocks moving here.

— Lisa Kailai Han

Tesla to revamp Model Y, report says

Tesla is readying to refresh its Model Y vehicle from the company's plant in Shanghai, Bloomberg News reported, citing people familiar with the matter. The report said production of the new Model Y could start in the middle of next year.

Tesla shares remained little changed in the premarket.

— Fred Imbert

A flat open in Europe

The pan-European Stoxx 600 index was little changed in early trade. Tech stocks added 0.6% to lead gains while insurance shares fell 0.4%.

The European blue chip index remained around the 477.6 mark, up 12.41% on the year and not far below the index's record closing high of 483.44 notched in November 2021.

- Elliot Smith

Where stocks stand as year-end nears

The three major indexes remain on pace for notable gains this month, quarter and year with just three sessions left by all three measures.

Here's how much the three have gained in December:

• The Dow has gained 4.4%.
• The S&P 500 has gained 4.5%.
• The Nasdaq Composite has gained 6%.

Here's the advances over the fourth quarter:

• The Dow has gained 12.1%.
• The S&P 500 has gained 11.4%.
• The Nasdaq Composite has gained 14%.

Here's where the three stand on the year:

• The Dow has gained 13.3%.
• The S&P 500 has gained 24.4%.
• The Nasdaq Composite has gained 44%, on pace for its best year since 2003.

— Alex Harring

Ascent Industries climbs after announcing deal to sell business arm

Manufacturing stock Ascent Industries jumped more than 5% in extended trading after announcing the sale of its carbon steel pipe and tubing business.

The Illinois-based company sold the business, called Specialty Pipe & Tube, in an all-cash transaction of around $55 million. Profit from the transaction, which closed Friday, will be used in part to pay down debt, Ascent said in a press release.

Shares have fallen nearly 7% in 2023, bucking the broader market's ascent.

— Alex Harring

Stock futures are little changed

Stock futures were muted shortly after 6 p.m. ET.

Futures tied to the Dow, S&P 500 and Nasdaq 100 all traded near flat.

— Alex Harring