Stocks, Treasury yield climb on Christmas Eve

Stocks finished higher on a shortened day of Christmas Eve trading as the 10-year Treasury yield neared 3%.

The Dow Jones industrial average and S&P 500 again set records for all-time closing highs, reaching 16,357.55 and 1,833.32, respectively.

At the 1 p.m. ET closing bell, the Dow and S&P 500 index logged gains of 0.4% and 0.3%, respectively. The Nasdaq composite finished 0.1% higher.

Government reports showed durable goods orders surging as home sales gave up some ground.

The Commerce Department said orders for durables jumped 3.5% in compared with October, when orders had fallen 0.7%. The increase was led by a 21.8% jump in demand for commercial aircraft, which can be volatile.

Homebuilder stocks rose after the government reported that new home sales rose at a faster pace than analysts were expecting last month.

But still, sales slipped slightly after a big surge the previous month. The figures add to evidence that the housing market is struggling to sustain the pace of its recovery.

The yield on the 10-year Treasury sprang 1.8%, climbing to 2.98%. It's been almost two and a half years since the yield surpassed 3%.

On Monday, the Dow Jones industrial average rose 73.47 points, or 0.5%, to a record close of 16,294.61. The Standard & Poor's 500 index gained 9.67 points, or 0.5%, to close at at a record 1,827.99. The Nasdaq composite jumped 44.16 points, or 1.1%, to 4,148.90.

Historically, stocks perform well during the holiday season, albeit with light trading, and this year has followed that trend, with the market setting new records thanks to several strong reports indicating a strengthening recovery. The Fed's announcement that it will begin to slowly taper its economic stimulus has also removed a degree of uncertainty from the market.

In Asia, stock indexes finished higher, despite losing early gains in late trading. Japan's Nikkei 225 index gained 18.91 points, or 0.1%, to close at 15,996.88, after touching above the 16,000 level for the first time in six years in the morning session. China's Shanghai Composite added 3.20 points, or 0.2%, to finish at 2,104.66. Hong Kong's Hang Seng index gained 257.99 points, or 1.1%, to 23,179.55.

Major European benchmarks also ended higher, with Britain's FTSE 100 index up 0.2% and France's CAC-40 up 0.1%.

Contributing: The Associated Press