U.S. stocks recorded their best day in almost a decade, as the Dow surged more than 1,000 points, notching its biggest single-day gain in history. Wednesday’s rally also offset the worst Christmas Eve in stock market history. The rebound came on the back of a report that holiday sales were the strongest in years. Also, tech and energy stocks rallied, helping the broader market.
All the three indexes notched their largest percentage gains in nearly a decade. Trading on the New York Stock Exchange was closed on Tuesday for Christmas.
The Dow Jones Industrial Average (DJI) advanced 5% to close at 22,878.45. The S&P 500 climbed 5% to close at 2,467.70. The Nasdaq Composite Index closed at 6,554.36, soaring 5.8%. A total of 9.5 billion shares were traded on Wednesday, higher than the last 20-session average of 9.1 billion shares. Advancers outnumbered decliners on the NYSE by a 4.84-to-1 ratio. On Nasdaq, a 3.80-to-1 ratio favored advancing issues.
How did the Benchmarks Perform?
The Dow added 1,086.25 points, recording its biggest single-day gain in history. The previous record point gain for the index was 936.42 points on Oct 13, 2008. Also, Wednesday’s gain marked the biggest upside percentage move for the Dow since Mar 23, 2009, when it had soared 5.8%.
The S&P 500 gained 116.60 points, recording its best day since March 2009. At the start of the session the S&P 500 came within 2 points of falling 20% from its late September closing high. Energy, consumer discretionary and technology were the biggest gainers. The Energy Select Sector SPDR (XLE) and the Consumer Discretionary Select Sector SPDR (XLY) rallied 6.2% and 5.9%, respectively. The Technology Select Sector SPDR (XLK) gained 6%. All the 11 major S&P 500 sectors ended in positive territory.
The tech-heavy Nasdaq rose 361.44 points, registering its best close since Mar 23, 2009. Shares of Amazon.com, Inc. AMZN and Apple, Inc. AAPL surged 9.5% and 7%, respectively. Apple has a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Wednesday also marked the best ever post-Christmas rally in stock-market history. However, all there major indexes still remain down more than 10% in December, with the Nasdaq in bear-market territory.
Retail Stocks Lead the Rally
On Wednesday, early reports suggested that holiday retail sales were the strongest in years. Per Mastercard Spending Pulse, holiday retail sales jumped 5.1% from Nov 1 through Dec 24 from the year-ago period, increasing at its fastest pace in six years.
Per the report, shoppers spent more than $850 billion this holiday season. This lifted investors’ sentiment, sending retail stocks on a rally. The rally was led by Amazon, after the e-commerce giant said that it registered another record holiday season.
A strong selloff on Monday sent all three major indexes down more than 2%. The plunge came after Treasury Secretary Steven Mnuchin last week called the CEOs of major banks to assess the health of the banking system. Moreover, on Monday, multiple reports emerged saying that President Donald Trump is discussing how to remove Fed chair Jerome Powell from his position, which ignited fears among investors leading to huge selloffs.
Energy, Tech Stocks Help Markets
Oil futures were came under tremendous pressure last week and on Monday. On Wednesday, energy stocks rebounded from a 17-month low, as U.S. crude oil prices jumped more than 8%. This sent energy stocks soaring, with shares of Marathon Oil Corporation MRO surged 11.9%. Tech stocks, which too have been taking a beating for a while now, rebounded on Wednesday with all big tech companies recording impressive percentage gains.
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