US stocks were attempting a modest rebound on Wednesday, boosted by technology shares and an Amazon-led jump in retailers, following four sessions of steep losses that pushed the S&P 500 and Dow Industrials near bear market territory.
Dow Jones was down 387.30 points at 22,491.15, the S&P 500 was down 39.21 points at 2,428.49 and the Nasdaq was down 98.10 points at 6,456.25. The Nasdaq and S&P 500 achieved similar daily gains, notching their most impressive rallies since March 2009.
"It was probably a pretty good retail-oriented holiday and that probably has a lot to do with what's happening today", said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group.
Markets were roiled ahead f the Chrismas break due to a number of political headlines taking the limelight. The overall USA economy is still strong, despite an ongoing trade war President Trump is waging with China and worries about a government shutdown.
It also helped that the White House economic adviser tried to reassure the market that Mr Powell was in no danger of getting fired, as his job was "100 per cent" safe.
Next, the White House offensive to shore up confidence in Federal Reserve Chairman Jerome Powell after verbal lashings by Trump looks to have finally gained traction. Some suggest focusing on stocks from emerging markets, where proponents say particularly sharp drops in price have left them looking cheap.
Even so, traders have been jittery this autumn over signs that the global economy is slowing, the escalating US trade dispute with China and another interest rate increase by the Fed.
The International Monetary Fund expects USA economic growth to slow to 2.5 percent next year from 2.9 percent in 2018. The S&P 500 is 8% lower this year, while unemployment is near a 50-year low and GDP grew at 3.4% in the third quarter. And if inflation spikes unexpectedly higher, it could push the Fed to get more aggressive about raising rates, which would further hinder growth.
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President Donald Trump said a day earlier that the rout that took stocks down 19.8 per cent from a record provided a "tremendous opportunity to buy".
Asian markets also rallied, buoyed by the positive news from Wall Street. But such gains would come with that one big catch.
The energy sector was the best performing on Thursday as oil-exposed stocks lifted on the back of the price rise.
Traders work on the floor of the New York Stock Exchange in New York, Dec. 24, 2018. Energy stocks also rebounded with a almost 10-percent rise in oil prices on December 26. Brent crude, used to price worldwide oils, shed 68 cents to $53.79 a barrel.
The dollar fell to 110.53 yen from 111.36 yen on Wednesday.
Declining issues outnumbered advancers for a 4.52-to-1 ratio on the NYSE and for a 2.65-to-1 ratio on the Nasdaq. The euro weakened to $1.1387 from $1.1404. At that bottom, the gauge experienced three days of gains greater than 1.5 percent - and continued on to its best month in 20 years.
"The concerns are government shutdown, the economy, the President - what time is he going to tweet out about Federal Reserve", said Larry Benedict, founder of the Opportunistic Trader in Boca Raton, Florida.