Stocks Battle Back to Extend Yesterday’s Surge…..

U.S. stocks staged a final-hour comeback from hefty intraday losses, with the S&P 500 adding to yesterday’s largest percent rise since 2009 and the Dow swinging 870 points during the day following Wednesday’s biggest point gain in history. Stocks remained resilient and volatile in the face of the government shutdown, global growth concerns, Fed policy mistake fears and lingering trade uncertainty. Early losses came as U.S. Consumer Confidence fell more than expected and Chinese industrial profits dropped for the first time in nearly three years. Treasury yields finished mixed and the U.S. dollar saw pressure. Gold gained ground and crude oil resumed its fall after yesterday’s sharp recovery.

The Dow Jones Industrial Average (DJIA) rose 260 points (1.1%) to 23,139, the S&P 500 Index increased 21 points (0.9%) to 2,489, and the NASDAQ Composite gained 25 points (0.4%) to 6,579. In moderately heavy volume, 1.1 billion shares were traded on the NYSE and 2.4 billion shares changed hands on the NASDAQ. WTI crude oil traded $1.61 lower to $44.61 per barrel and wholesale gasoline was off $0.03 at $1.29 per gallon. Elsewhere, the Bloomberg gold spot price advanced $8.28 at $1,275.42 per ounce, and the Dollar Index—a comparison of the U.S. dollar to six major world currencies—decreased 0.5% to 96.54.

The Consumer Confidence Index fell to 128.1 in December from November’s upwardly-revised 136.4 and below Bloomberg estimates of 133.5. The Present Situation Index and the Expectations Index of business conditions for the next six months both declined month-over-month (m/m). On employment, the labor differential—consumers’ appraisal of jobs being “plentiful” minus being “hard to get”—rose to 34.6 from the 34.2 level posted in November. However, the portion of the survey showing the percent of people expecting more jobs in the next six months fell by the most since 1977.

Senior Director of Economic Indicators at the Conference Board Lynn Franco, said “Expectations regarding job prospects and business conditions weakened, but still suggest that the economy will continue expanding at a solid pace in the short-term. While consumers are ending 2018 on a strong note, back-to-back declines in Expectations are reflective of an increasing concern that the pace of economic growth will begin moderating in the first half of 2019.”

Weekly initial jobless claims decreased by 1,000 to 216,000, in line with estimates, with the prior week’s figure revised higher to 217,000. The four-week moving average decreased by 4,750 to 218,000, while continuing claims decreased by 4,000 to 1,701,000, north of estimates of 1,675,000.

A release of new home sales data is delayed due to the government shutdown.

Treasuries were mixed, with the yield on the 2-year note falling 4 basis points (bps) to 2.57% and the yield on the 10-year note dropping 2 bps to 2.78%, while the 30-year bond rate ticked 1 basis point higher to 3.07%.

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