United States stocks shake off slide with late-afternoon rally

Ann Santiago
December 29, 2018

On Wednesday, volume was substantially lighter than average for the broad market represented by the S&P 500 (SPX). The Russell 2000 index of smaller-company stocks picked up 62.89 points, or 5 percent, at 1,329.81.

Among retailers, Macy's gained 4.3 percent and Amazon.com rose 4.3 percent.

Meanwhile, the energy sector was only slightly behind the consumer discretionary sector, also posting a gain of more than 6% as oil prices climbed sharply. The Nasdaq Composite Index advanced 361.44 points, or 5.84 percent, to 6,554.36.

On Thursday, the Dow erased a 600 point loss and finished with a gain of 260 points.

Wall Street saw its worst preforming Christmas Eve drop this year, with the benchmark S&P 500 getting very close to dropping into bear market territory. The Dow Jones Industrial Average surged nearly 700 points and the Nasdaq Composite jumped 4%.

Wednesday's rally comes two days after stocks were routed on a disastrous Christmas Eve that saw the Dow and the Nasdaq suffer their worst-ever losses in December 24 trading.

Gains in banks, retailers and health care companies are outweighing losses in energy stocks and elsewhere in the market. Government data showed profit for companies in steel, construction materials, oil, chemicals and equipment manufacturing declined 1.8 per cent from a year earlier, a reverse from October's 3.6 per cent gain.

On Dec. 19, the USA central bank raised short-term interest rates by 25 basis points to a range of 2.25 percent to 2.50 percent, in line with market expectations.

US stocks attempt rebound

"The Fed is engaged in the unprecedented experiment of simultaneously unwinding its balance sheet and "normalizing" interest rates", the article said, adding that the consequences were hard to predict. Markets in Europe, Hong Kong and Australia were closed.

Most economists expect growth to slow in 2019, though not by enough to slide into a full-blown recession. A bear market is a drop of 20 percent from a peak.

The head of the US Federal Reserve faces no risk of losing his job and President Donald Trump is happy with his Treasury secretary, White House economic adviser Kevin Hassett said in an apparent attempt to calm Wall Street nerves.

But concerns about a slowing global economy and the protracted trade dispute with China have not gone away, and they are likely to put pressure on the market again in coming days.

Other members of the FANG group, Facebook Inc (FB.O), Netflix Inc (NFLX.O) and Alphabet Inc (GOOGL.O), which has also been under pressure recently, rose between 0.4 percent and 2.8 percent.

WASHINGTON-The U.S. stock market rose sharply on December 26 after staging its worst-ever Christmas Eve performance.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.79 percent from 2.75 percent late Monday. Copper fell 1.2 percent to $2.67 a pound.

On Wednesday, short-covering was feverish as the Thomson Reuters United States Most Shorted Index enjoyed its best percentage rise in its six-year history. The euro weakened to $1.1387 from $1.1404.

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