Throughout Wall Street’s December meltdown, analysts have been saying that markets were plunging despite plenty of evidence that the United States economy remains strong and corporate profit growth is healthy.þþThat argument finally found listeners on Wednesday, when early reports of a strong holiday-shopping season helped lift the S&P 500 by nearly 5 percent, its best day since 2009. The Nasdaq added 5.8 percent, and the Dow Jones industrial average rose just under 5 percent. That jump, over 1,086 points, represented the Dow’s best single-session gain ever, although a number of days have eclipsed that in percentage terms.þþA substantial rise in crude oil prices added to the lighter mood, as did efforts from the White House to ease up on criticism of the Federal Reserve.þþThe rally continued in Asia, led by Japan, where stocks on Thursday opened 3.7 percent higher.þþThe rebound in the United States offered investors a much-needed reprieve from a decline that had picked up speed in December. Stocks had fallen for four consecutive days through Monday, and the drop had pushed the S&P 500 to within just a few points of a bear market — defined as a 20 percent retreat from its high.þþStill, the S&P 500 is on pace for its worst annual performance since the financial crisis a decade ago and is only back to where it stood on Dec. 20. Plus, the move in prices Wednesday was most likely heightened by lighter-than-average trading volume during a holiday week.þþBut to some traders, the move upward finally made sense.þþ“Fundamentally you’ve got good growth here in the States, you have reasonable growth overseas, you’re going to have record earnings in 2019 and possibly in 2020 as well, you’ve got low inflation,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. Before Wednesday’s steep rise, the market had fallen too far, Mr. Wren said, and it was ready to climb thanks to the underlying strength of the American economy.þþThe rally was broad-based. Only one stock in the S&P 500, Newmont Mining, fell.þþData from Mastercard showed that sales in the United States this holiday season grew at their fastest pace in six years, and investors flocked to the retail sector. Stock in the department store Kohl’s jumped over 10 percent, and shares of Amazon, which called its season “record-breaking” without offering financial details, rose more than 9 percent.þþOil prices, too, were on the move after Russia’s energy minister, Alexander Novak, told a Russian newspaper that the country would benefit from continuing to cooperate with the Organization of the Petroleum Exporting Countries on regulating production. American crude, the benchmark for oil prices, rose almost 9 percent to over $46 a barrel, and shares of large energy producers also climbed.
Source: NY Times
