Today: Strong reading of U.S. economic growth helps the Dow Jones industrial average close higher than 18,000 for the first time.

The Lead: Dow hits 18,000 as U.S. economy strengthens

The Dow Jones industrial average topped 18,000 for the first time Tuesday, after the federal government reported that U.S. economic growth hit a decade-high in the third quarter.

The Bureau of Economic Analysis reported Tuesday morning that U.S. gross domestic product increased by 5 percent in the third quarter, a big jump from its previous estimate of 3.9 percent. The quarterly GDP growth would be the largest recorded in the U.S. since 2003, topping a strong second quarter reading of 4.6 percent.

“The economy is on fire,” Chris Rupkey, chief financial economist at Bank of Tokyo-Mitsubishi, told Bloomberg News.

Other economic reports released Tuesday backed up that summation: Consumer sentiment about the economy hit an eight-year high, as Americans’ spending and income jumped in November. Along with soaring job growth and a strong housing market — trends that are even more pronounced in the Bay Area — almost all indicators point to an economy recovering strongly from the Great Recession.

“There is a positive feedback loop going on at the moment,” Mike Jakeman, global analyst for the Economist Intelligence Unit, explained. “Job creation is running at the strongest rate for 15 years. More people in work means more income, which means more private spending, which means more business investment, which means more hiring.”

Wall Street bought into the positive loop, as the Dow received the final boost it needed to top 18,000 for the first time and the Standard & Poor’s 500 closed at a record high for a second consecutive day.

“The market was roaring yesterday, and going into the end of the year it keeps pushing higher,” Stephen Carl, head equity trader at Williams Capital Group, noted to Bloomberg. “These numbers are adding fuel to the fire.”

Tech stocks did not benefit Tuesday, however: The SV150 index of Silicon Valley’s largest technology companies and the tech-heavy Nasdaq declined 0.3 percent apiece.

Biotech stocks were hurt again, including the valley’s largest pharmaceutical firm, Gilead Sciences. The Foster City company plummeted Monday after the largest U.S. pharmacy-benefits manager chose a new competitor to Gilead’s hepatitis C medication, and declined to $89.45 Tuesday for a two-day loss of $19, or 17.5 percent, despite doubts that similar deals are a given.

“The stock reaction suggests investors see heightened risk of price and market share competition than previously expected, but whether other payors covering the other 95 percent of U.S. hepatitis C patients will follow suit is uncertain,” Jefferies analyst Thomas Wei wrote in a Tuesday note.

Apple dropped 0.4 percent to $112.54 while pushing out an automated security update to Mac computers for the first time. The Cupertino tech giant and partners in a large patent buy sold about two-thirds of the acquired intellectual property as a drone video showed off new views of its developing new headquarters.

Google added 1.2 percent to $538.77 while dealing with legal matters: Musicians threatened a $1 billion lawsuit against YouTube if it doesn’t take down thousands of videos, and the Mountain View company lost an attempt to block a subpoena in its fight with the Mississippi attorney general. Facebook fell from the record high reached Monday, declining 1 percent to $80.61, and Yahoo dropped 2.2 percent to $50.02 despite an analyst note that compared Tumblr favorably with Instagram.

SV150 market report

Up: GoPro, SolarCity, Symantec, HP, Google, Salesforce

Down: Gilead, Zynga, Twitter, Yahoo, Facebook

The SV150 index of Silicon Valley’s largest tech companies: Down 4.6, or 0.27 percent, to 1,695.57

The tech-heavy Nasdaq composite index: Down 16, or 0.33 percent, to 4,765.42

The blue chip Dow Jones industrial average: Up 64.73, or 0.36 percent, to 18,024.17

And the widely watched Standard & Poor’s 500 index: Up 3.63, or 0.17 percent, to 2,082.17

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