Markets dive on Christmas Eve, getting closer to bear territory for more indices.
Stocks increased in afternoon trading on Wednesday, brushing off a rout two days earlier that put the Standard & Poor’s 500 on the brink of bear territory.
Strong retail sales during the holidays and a rally in oil prices helped to boost stocks, along with White House reassurances that President Trump won’t fire the Federal Reserve chairman.
The Dow Jones Industrial average gained 546 points, or 2.51 percent, to 22,338 in afternoon trading. The S&P 500 jumped 62 points, or 2.62 percent, to 2,413.
The tech-heavy Nasdaq increased 218 points, or 3.52 percent, to 6,411 in Wednesday trading. The Russell 2000 – an index of small-company stocks in a bear market – rose in midday trading. It was up 31 points, or 2.41 percent, to 1,298.
A bear market is when an index falls 20 percent or more from its most recent closing high.
“Part of the big jump today is the rise coming out of energy. It’s the leading sector,” said Benjamin Lau, chief investment officer of Apriem Advisors in Irvine, California. “It helped to turn things around.”
Crude oil prices leaped 7.34 percent to $45.65 in afternoon trading. Shares of Exxon were up 3.23 percent to $67.63, while Chevron stock rose 3.01 percent to $104.03.
Investors also got good news from the retail front. Holidays sales increased 5.1 percent this year to more than $850 million, marking the best season in six year, according to data from Mastercard on Wednesday. Online sales grew 19.1 percent year over year.
The news comes after Amazon announced Wednesday morning that the retailer had “more items ordered worldwide than ever before,” according to a company press release.
Amazon stock jumped 7.09 percent to $1,439.24 in afternoon trading.
Drama that gripped the White House days ago also has subsided some. Kevin Hassett, an adviser to Trump, said Wednesday that Fed Chair Jerome Powell was “100 percent” safe in his position as the central bank head. Over the weekend, Trump reportedly considered firing the Powell, blaming the stock market swoon on the Fed’s interest rate hikes.
That, along with the partial government shutdown, the departure of Defense Secretary James Mattis earlier than planned, and Treasury Secretary Steve Mnuchin’s unsuccessful efforts to reassure investors, roiled markets on Christmas Eve Day.
Despite Wednesday’s rally, market watchers remain wary. The S&P 500 is near its worst December performance ever and the Dow remains close to turning in the worst December since 1931.
“I’m not convinced this is a turnaround rally,” Lau said. “It’s still a seller’s market.”
The stock market was closed on Tuesday for Christmas Day. It closes again on New Year’s Day.
President Donald Trump thinks the stock market would crash if he were impeached, but critics are still placing their bets.
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