Retailers lead Wall Street rebound after four-day slide
U.S. stocks were rebounding sharply on Wednesday, fuelled by an Amazon-led surge in retail shares after a steep slide for equities had put the S&P 500 on the brink of a bear market.
The S&P 500 and the Dow industrials jumped more than 2 percent each while the Nasdaq surged over 3 percent in the first day of trading following the Christmas holiday, when the market was closed.
Sales in the 2018 U.S. holiday shopping season rose 5.1 percent to over $850 billion, the strongest in six years, according to a Mastercard report. The S&P 500 retailing index <.spxrt> jumped 5.4 percent, while shares of online retailer Amazon
Oil prices also surged, boosting sentiment for risk assets such as stocks, while underpinning a 3.8 percent gain for energy shares <.spny>.
Stocks found their footing after wobbling in morning trade. The S&P 500 came within 2 points of falling 20 percent from its late-September closing high, a threshold commonly used to define a bear market.
"The market is extremely oversold where we left it" on Monday, said Brett Ewing, chief market strategist at First Franklin Financial Services in Tallahassee, Florida.
"You cannot make the assumption that this correction is over, but today`s action is definitely a very positive signal."
The Dow Jones Industrial Average <.dji> rose 621.04 points, or 2.85 percent, to 22,413.24, the S&P 500 <.spx> gained 67.58 points, or 2.87 percent, to 2,418.68 and the Nasdaq Composite <.ixic> added 234.71 points, or 3.79 percent, to 6,427.63.
Ewing said that short-sellers who profit from market declines may have been covering their bets on Wednesday, "which makes violent moves up."
The S&P 500 was on track to break a four-session streak of declines. But it was still on pace for its biggest monthly percentage drop since October 2008, during the throes of the financial crisis.
Ten of 11 major S&P 500 sectors were in positive territory, with the technology sector <.splrct>, beaten up during the recent pullback, up 3.8 percent.
The head of the U.S. Federal Reserve faces no risk of losing his job and President Donald Trump is happy with his Treasury secretary, a White House official said in an apparent attempt to calm Wall Street nerves frayed by Trump`s criticism of the Fed.
The most recent decline in stocks followed a Fed meeting last week, when it raised interest rates again and Fed chairman Jerome Powell did not soften his tone about the outlook for further financial tightening to the degree investors had hoped.
"I think the market is realizing that the Fed is open to being more flexible," Ewing said.
Advancing issues outnumbered declining ones on the NYSE by a 3.81-to-1 ratio; on Nasdaq, a 3.53-to-1 ratio favoured advancers.
The S&P 500 posted no new 52-week highs and 194 new lows; the Nasdaq Composite recorded 7 new highs and 485 new lows.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)
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