Published: Fri, December 28, 2018
Markets | By Jeffery Armstrong

Dow rallies, closes up more than 1,000 points

Dow rallies, closes up more than 1,000 points

NY stocks had hurtled higher in post-Christmas trade yesterday, following strong data and White House reassurances that Powell would remain in his post. Bank of America, JPMorgan and Goldman Sachs slipped more than 1 percent as the yield on the the 10-year Treasury fell to 2.76 percent from 2.79 percent. "The recent selloff reflected fears of an impending recession which were blown away today by Amazon and other retailers reporting a record holiday selling season".

Earlier this week, the NY stock exchange recorded its worst-ever Christmas Eve plunge, following reports that US President Donald Trump had considered firing Federal Reserve chairman Jerome Powell.

Kevin Hassett, chairman of the White House Council of Economic Advisers, said yesterday that U.S. Federal Reserve Chairman Jerome Powell's job was not in jeopardy. All three benchmarks advanced by at least 5 per cent. Rallies in retail and energy shares led the gains, as NY recovered the losses suffered in the previous session.

WALL STREET JUMP: On Wednesday, U.S. markets snapped a four-day losing streak and clocked their best day in more than 10 years. Shares of Wayfair, Kohl's and Dollar General all rose at more than 6 percent. Nasdaq rose 5.8pc or 361 points to 6,554.

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ON THE BRINK: Wednesday's gains provide the S&P 500 some breathing room after finishing the shortened trading session Monday just shy of a 20-percent drop from its peak three months ago.

Energy stocks also fell as the price of USA crude oil slid 1.5 percent a day after posting its biggest increase in two years.

Benchmark U.S. crude dropped 1.5 percent to $45.52 a barrel in NY. The index fell to 21,792.20 points at the end of trading, down 18.8 percent from its peak on September 20.

The near-decade long bull market that began in March 2009 earned a reprieve on Wednesday's rally.

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USA stock markets struggled to build a post-Christmas rally on Wednesday morning, recovering some of the ground they lost after their worst ever performance on Christmas Eve. "They have record kinds of numbers".

The S&P 500 index fell 44 points, or 1.8 percent, to 2,423 as of 12:55 p.m. The Dow closed down 653 points. Wednesday through Friday are normal trading days. All 30 Dow members gained, with Nike and Apple rising more than 7 percent. Mnuchin had come under attack over the weekend for holding a call with top bank CEOs to discuss liquidity. The put call ratio - a measure for downside protection against a stock market decline - reached the highest level since at least 2003 Thursday, pointed out SunTrust Chief Markets Strategist Keith Lerner. "If you net today and Monday out, it doesn't tell you anything new".

The firm said investors should expect more volatility and attributed the unease to "chaos in Washington", as well as the Federal Reserve's decision to stick to plans for gradual interest rate increases despite the recent stock turmoil.

"We have started to see the yen regain its place as the safe haven of choice", MUFG's Hardman said. "They're raising interest rates too fast; that's my opinion". At the same time, it's not a real shocker that the president is not too happy that the Fed made a decision to jack up interest rates again. "We can assess the fundamental drivers, such as poor global economics, the Fed not altering its forward guidance or providing flexibility to the pace of balance sheet normalization, and ascertain nothing has really changed here", he added. "So while there is a minority view that stocks would rally if Powell were to be replaced, I believe it would cause a serious sell-off because of what it represents". "The Fed is like a powerful golfer who can't score because he has no touch - he can't putt!"

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