Stocks Find Some Post-Holiday Cheer…..U.S. stocks recovered sharply following the Christmas break and after continuing Q4’s rout on Monday to near bear market territory, with the Dow notching its largest point gain in history. Comments from the White House appeared to soothe flared-up uncertainty regarding the job security of Fed Chairman Powell, while further signs of strong U.S. consumer holiday spending also seemed to help sentiment. However, volatility remained amid festering Fed mistake concerns, global growth worries and trade uncertainty. Treasury yields and the U.S. dollar advanced, while gold dipped. Crude oil snapped back from a recent tumble, aided by reports that suggested OPEC and its allies could hold an extraordinary meeting.
The Dow Jones Industrial Average (DJIA) rallied 1,086 points (5.0%) to 22,878, the S&P 500 Index jumped 117 points (5.0%) to 2,468, and the NASDAQ Composite surged 361 points (5.8%) to 6,554. In moderately heavy volume, 1.0 billion shares were traded on the NYSE and 2.5 billion shares changed hands on the NASDAQ. WTI crude oil gained $3.69 to $46.22 per barrel and wholesale gasoline was up $0.08 at $1.32 per gallon. Elsewhere, the Bloomberg gold spot price dipped $2.25 at $1,266.29 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—advanced 0.5% to 97.04.
The Richmond Fed Manufacturing Activity Index for December unexpectedly declined to -8, the first reading denoting contraction (a level below zero) since 2016, from November’s 14 figure, and versus the Bloomberg estimate of 15.
The 20-city composite S&P Core Logic Case-Shiller Home Price Index showed a 5.0% year-over-year gain in home prices in October, versus forecasts of a 4.9% rise. Compared to last month, home prices were up 0.4% on a seasonally adjusted basis, slightly above expectations of 0.3% increase.
Treasuries were lower, with the yields on the 2-year note and the 30-year bond rising 7 basis points (bps) to 2.62% and 3.07%, respectively, while the yield on the 10-year note advanced 8 bps to 2.81%.
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