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| Stocks Bounce Back From Edge of Bear Market | Stocks Bounce Back From Edge of Bear Market |
| (about 4 hours later) | |
| Throughout Wall Street’s December meltdown, analysts have been saying that markets were plunging despite plenty of evidence that the United States economy remains strong and corporate profit growth is healthy. | Throughout Wall Street’s December meltdown, analysts have been saying that markets were plunging despite plenty of evidence that the United States economy remains strong and corporate profit growth is healthy. |
| That argument finally found listeners on Wednesday, when early reports of a strong holiday-shopping season helped lift the S&P 500 by nearly 5 percent, its best day since 2009. The Nasdaq added 5.8 percent, and the Dow Jones industrial average rose just under 5 percent. That jump, over 1,086 points, represented the Dow’s best single-session gain ever, although a number of days have eclipsed that in percentage terms. | That argument finally found listeners on Wednesday, when early reports of a strong holiday-shopping season helped lift the S&P 500 by nearly 5 percent, its best day since 2009. The Nasdaq added 5.8 percent, and the Dow Jones industrial average rose just under 5 percent. That jump, over 1,086 points, represented the Dow’s best single-session gain ever, although a number of days have eclipsed that in percentage terms. |
| A substantial rise in crude oil prices added to the lighter mood, as did efforts from the White House to ease up on criticism of the Federal Reserve. | A substantial rise in crude oil prices added to the lighter mood, as did efforts from the White House to ease up on criticism of the Federal Reserve. |
| The rally continued in Asia, led by Japan, where stocks on Thursday opened 3.7 percent higher. | |
| The rebound in the United States offered investors a much-needed reprieve from a decline that had picked up speed in December. Stocks had fallen for four consecutive days through Monday, and the drop had pushed the S&P 500 to within just a few points of a bear market — defined as a 20 percent retreat from its high. | |
| Still, the S&P 500 is on pace for its worst annual performance since the financial crisis a decade ago and is only back to where it stood on Dec. 20. Plus, the move in prices Wednesday was most likely heightened by lighter-than-average trading volume during a holiday week. | Still, the S&P 500 is on pace for its worst annual performance since the financial crisis a decade ago and is only back to where it stood on Dec. 20. Plus, the move in prices Wednesday was most likely heightened by lighter-than-average trading volume during a holiday week. |
| But to some traders, the move upward finally made sense. | But to some traders, the move upward finally made sense. |
| “Fundamentally you’ve got good growth here in the States, you have reasonable growth overseas, you’re going to have record earnings in 2019 and possibly in 2020 as well, you’ve got low inflation,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. Before Wednesday’s steep rise, the market had fallen too far, Mr. Wren said, and it was ready to climb thanks to the underlying strength of the American economy. | “Fundamentally you’ve got good growth here in the States, you have reasonable growth overseas, you’re going to have record earnings in 2019 and possibly in 2020 as well, you’ve got low inflation,” said Scott Wren, senior global equity strategist at the Wells Fargo Investment Institute. Before Wednesday’s steep rise, the market had fallen too far, Mr. Wren said, and it was ready to climb thanks to the underlying strength of the American economy. |
| The rally was broad-based. Only one stock in the S&P 500, Newmont Mining, fell. | The rally was broad-based. Only one stock in the S&P 500, Newmont Mining, fell. |
| Data from Mastercard showed that sales in the United States this holiday season grew at their fastest pace in six years, and investors flocked to the retail sector. Stock in the department store Kohl’s jumped over 10 percent, and shares of Amazon, which called its season “record-breaking” without offering financial details, rose more than 9 percent. | Data from Mastercard showed that sales in the United States this holiday season grew at their fastest pace in six years, and investors flocked to the retail sector. Stock in the department store Kohl’s jumped over 10 percent, and shares of Amazon, which called its season “record-breaking” without offering financial details, rose more than 9 percent. |
| Oil prices, too, were on the move after Russia’s energy minister, Alexander Novak, told a Russian newspaper that the country would benefit from continuing to cooperate with the Organization of the Petroleum Exporting Countries on regulating production. American crude, the benchmark for oil prices, rose almost 9 percent to over $46 a barrel, and shares of large energy producers also climbed. | Oil prices, too, were on the move after Russia’s energy minister, Alexander Novak, told a Russian newspaper that the country would benefit from continuing to cooperate with the Organization of the Petroleum Exporting Countries on regulating production. American crude, the benchmark for oil prices, rose almost 9 percent to over $46 a barrel, and shares of large energy producers also climbed. |
| After leading Wall Street’s recent slide, technology stocks rebounded as well. Tech investors have had plenty of causes for concern. A slowing global economy could hurt sales, tensions are rising with China on manufacturing of devices, and privacy concerns are bringing the potential for regulation. Apple shares rose 7 percent, while stock in the semiconductor maker Advanced Micro Devices gained 7.5 percent and Facebook added more than 8 percent. | After leading Wall Street’s recent slide, technology stocks rebounded as well. Tech investors have had plenty of causes for concern. A slowing global economy could hurt sales, tensions are rising with China on manufacturing of devices, and privacy concerns are bringing the potential for regulation. Apple shares rose 7 percent, while stock in the semiconductor maker Advanced Micro Devices gained 7.5 percent and Facebook added more than 8 percent. |
| Bank stocks, which have taken the brunt of recent selling as worries grew that the United States economy was weakening, rose significantly. | Bank stocks, which have taken the brunt of recent selling as worries grew that the United States economy was weakening, rose significantly. |
| The rally doesn’t mean that this year’s precipitous decline in stock prices is over. Signs of economic health that encouraged the buying are doing little to address one of stock investors’ primary concerns. They’re worried that the Federal Reserve’s decision to continue raising interest rates, even if at a slightly slower pace, will hurt the economy and corporate profits. Higher interest rates on bonds or even savings accounts make stock investments less appealing as an alternative. | The rally doesn’t mean that this year’s precipitous decline in stock prices is over. Signs of economic health that encouraged the buying are doing little to address one of stock investors’ primary concerns. They’re worried that the Federal Reserve’s decision to continue raising interest rates, even if at a slightly slower pace, will hurt the economy and corporate profits. Higher interest rates on bonds or even savings accounts make stock investments less appealing as an alternative. |
| The Fed announced an interest-rate increase last week and said it would continue to withdraw the support it had offered the economy in the wake of the financial crisis. | The Fed announced an interest-rate increase last week and said it would continue to withdraw the support it had offered the economy in the wake of the financial crisis. |
| “The Fed is making a monumental mistake,” said Barry Bannister, the head of institutional equity strategy at the broker Stifel. “They do not realize how long and by how much they’ve tightened already, and until they back off the market’s going to have a very weak floor under it.” | “The Fed is making a monumental mistake,” said Barry Bannister, the head of institutional equity strategy at the broker Stifel. “They do not realize how long and by how much they’ve tightened already, and until they back off the market’s going to have a very weak floor under it.” |
| Adding to volatility has been the possibility that President Trump would consider firing the central bank’s chairman, Jerome H. Powell, because he disagreed with Fed policy. Mr. Trump, who previously sought to hitch his political success to a rising stock market, has blamed interest-rate increases for the downturn on Wall Street. | Adding to volatility has been the possibility that President Trump would consider firing the central bank’s chairman, Jerome H. Powell, because he disagreed with Fed policy. Mr. Trump, who previously sought to hitch his political success to a rising stock market, has blamed interest-rate increases for the downturn on Wall Street. |
| White House officials insisted again that the president had no plans to fire Mr. Powell, news that reassured investors. | White House officials insisted again that the president had no plans to fire Mr. Powell, news that reassured investors. |
| Kevin Hassett, the chairman of the Council of Economic Advisers, told reporters Wednesday morning that Mr. Powell’s job was “100 percent” safe. He echoed remarks by Treasury Secretary Steven Mnuchin and Mick Mulvaney, Mr. Trump’s incoming chief of staff, both of whom spent the weekend trying to persuade investors that the president did not plan to fire Mr. Powell. Those efforts had mostly backfired, in part because Mr. Trump continued to criticize his handpicked Fed chairman. | Kevin Hassett, the chairman of the Council of Economic Advisers, told reporters Wednesday morning that Mr. Powell’s job was “100 percent” safe. He echoed remarks by Treasury Secretary Steven Mnuchin and Mick Mulvaney, Mr. Trump’s incoming chief of staff, both of whom spent the weekend trying to persuade investors that the president did not plan to fire Mr. Powell. Those efforts had mostly backfired, in part because Mr. Trump continued to criticize his handpicked Fed chairman. |
| It also helped matters on Wednesday that Mr. Trump refrained from offering new criticism of the Fed, a marked difference from the days leading up to the Christmas holiday, when he railed against the central bank on Twitter and vowed to keep the government shut down for an extended period. In fact, for the first trading session in many days, Mr. Trump posted just one tweet: It was about his trip to Iraq. | It also helped matters on Wednesday that Mr. Trump refrained from offering new criticism of the Fed, a marked difference from the days leading up to the Christmas holiday, when he railed against the central bank on Twitter and vowed to keep the government shut down for an extended period. In fact, for the first trading session in many days, Mr. Trump posted just one tweet: It was about his trip to Iraq. |