Dow, S&P 500 hit new records ahead of ECB meeting

US stocks surged to close at fresh records Wednesday in anticipation the European Central Bank will extend its stimulus, and amid optimism about the American economy after the presidential election.

The Dow Jones Industrial Average jumped 1.6 percent to 19,549.62, its third straight record close, and the biggest increase since the November 8 presidential election.

The S&P 500 also notched a fresh record, rising 1.3 percent to 2,241.35, while the Nasdaq Composite Index gained 1.1 percent to 5,393.76, about five points shy of a record of its own.

The gains came on the heels of a strong day in European bourses ahead of Thursday's ECB meeting, which is expected to prolong a massive monetary stimulus program.

Analysts said the momentum in the US remains tilted to the upside amid expectations President-elect Donald Trump and the Republican-led Congress will enact pro-growth measures and loosen regulations.

"Right now people are making bets based on potential and whether that potential becomes real, we're not going to know for another six plus months," said Michael James, managing director of equity trading at Wedbush Securities.

James said stocks also were being propelled by the desire of some institutional investors to boost trading positions before the end of the calendar year.

US stocks have historically been strong in December, rising 72 percent of the time, according to S&P Dow Jones Indices.

Industrial and financial stocks continued to score gains, with American Express, Caterpillar and 3M all advancing more than two percent, as did Dow components Home Depot, IBM, Microsoft and Nike.

But pharmaceutical shares were the exception to the rally, after Trump told Time magazine he plans to crack down on runaway drug prices. Pfizer lost 1.2 percent, Amgen 2.7 percent and Mylan 3.8 percent.

Boeing rose 1.3 percent as it pledged to control costs on the redesign of Air Force One after President-elect Donald Trump blasted the aerospace giant for what he said were ballooning expenses.

Starbucks climbed 2.3 percent as it announced plans to add 12,000 cafes globally by 2021. It also said it was working on technology to permit customers to order via an artificial intelligence program.

AT&T rose 2.8 percent while Time Warner edged up 0.1 percent as the companies fended off skeptical questions from lawmakers over AT&T's proposed $85 billion takeover of Time Warner. The companies have argued that the deal will benefit consumers by disrupting the pay TV model, but some senators said it could hand too much power to AT&T.