This article is from the source 'nytimes' and was first published or seen on . It last changed over 40 days ago and won't be checked again for changes.

You can find the current article at its original source at https://www.nytimes.com/2018/12/26/business/business-stock-markets.html

The article has changed 14 times. There is an RSS feed of changes available.

Version 7 Version 8
Stocks Bounce Back From Edge of Bear Market Stocks Bounce Back From Edge of Bear Market
(35 minutes later)
Stocks rose on Wednesday, bolstered by strong data on holiday season retail sales and a sharp rise in crude oil prices, breaking a losing streak that had brought the S&P 500 close to bear-market territory. It didn’t take much, just some early reports of a strong holiday season for retailers and reassuring murmurs from Washington and Moscow, to put Wall Street in a brighter frame of mind.
The gains came as White House officials continued to try to calm a run of market volatility, insisting once again that President Trump had no plans to fire Jerome H. Powell, the Federal Reserve chairman, despite continuing to criticize the central bank’s policies. Mr. Trump, who had previously sought to hitch his political success to a rising stock market, has blamed the Fed’s interest rate increases for the downturn on Wall Street. Stocks were poised to break their losing streak on Wednesday, as sales data showed American consumers remain healthy and Russia signaled that it was willing to try to help keep oil prices higher. Investors were also reassured by a White House official’s statement that Jerome H. Powell’s job as Federal Reserve chairman was “100 percent” safe.
[Read more about how Mr. Trump has become fixated on Fed Chairman Jerome Powell, and has asked aides whether he has the power to fire him.] The gains brought the S & P 500-stock index back from the brink of a bear market — a decline of 20 percent from its peak — though 2018 remains on track to be the benchmark’s worst year since the global financial crisis a decade ago.
Kevin Hassett, the chairman of the Council of Economic Advisers, told reporters Wednesday morning that Mr. Powell’s job was “100 percent” safe. His comments came after similar 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 mostly backfired, in part because Mr. Trump continued to criticize his handpicked Fed chairman. The market’s rally was broad. Retail stocks led the gains after data from Mastercard showed that retail sales in the United States this holiday season were 5.1 percent higher than last year, their most robust growth in six years. Kohl’s was among the best-performing stocks in the S & P 500, climbing more than 8 percent. Shares in Amazon, which described the holiday season as “record breaking” without offering details, rose almost 7 percent.
Worries about the White House’s response to the meltdown in the financial markets have dovetailed with other concerns — including weakness in global trade and the economic impact of a potentially lengthy government shutdown — to feed the volatility on Wall Street. Even bank stocks, which have taken the brunt of recent selling as worries grew that the United States economy was weakening, rose significantly. Shares of Wells Fargo were up 2.4 percent and shares of Bank of America up 4 percent.
■ Trading was volatile, and stocks initially swung between modest gains and small losses. By early afternoon, however, the S&P 500 had risen more than 2.5 percent. It was a market move that finally made sense, at least to some traders.
■ Before trading started on Wednesday, the S&P 500 had fallen 19.7 percent from its peak on Sept. 20. A bear market is defined as a drop of at least 20 percent. The index is still on track to post its worst annual performance since the financial crisis a decade ago. “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. He said the market, before Wednesday’s steep rise, was oversold and ready to post gains as a result of the underlying strength of the American economy.
■ Retail stocks led the gains after data from Mastercard showed that retail sales in the United States this holiday season were 5.1 higher than last year while experiencing their most robust growth in six years. Kohl’s was the one of the performing stocks in the S&P 500, climbing more than 4.5 percent. Shares in Amazon, which described the holiday season as “record breaking” without offering financial details, also rose more than 4 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 prices. American crude, the benchmark oil price, rose more than 8 percent.
■ Benchmark prices for American crude oil rose as much as 8 percent Wednesday, rebounding from a decline that had brought the price below $43 a barrel. Along with energy prices, shares of companies like Exxon Mobil and Marathon Oil were up sharply. White House officials continued to try to calm a run of market volatility, insisting again on Wednesday that President Trump had no plans to fire Mr. Powell despite the president’s criticism of the Federal Reserve’s policies. Mr. Trump, who previously sought to hitch his political success to a rising stock market, has blamed the Fed’s interest rate increases for the downturn on Wall Street.
■ Trading was mixed in Asian markets. Japan’s Nikkei 225 stock index rose 0.9 percent, but the Shanghai Composite index was down 0.3 percent, and the Shenzhen Composite fell 0.4 percent. The Kospi index in South Korea fell 1.3 percent, and the Taiex in Taiwan fell 0.5 percent. [Read more about how Mr. Trump has become fixated on Mr. Powell and has asked aides whether he has the power to fire him.]
■ Many European markets were closed for the holidays. 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 mostly backfired, in part because Mr. Trump continued to criticize his handpicked Fed chairman.
Worries about the White House’s response to the meltdown in the financial markets have dovetailed with other concerns — including weakness in global trade and the economic impact of a potentially long government shutdown — to feed the volatility on Wall Street.
Before trading started on Wednesday, the S & P 500 had fallen 19.7 percent from its peak on Sept. 20. A bear market is defined as a drop of at least 20 percent.
Despite the rally, some market analysts were sounding notes of caution. Barry Bannister, the head of institutional equity strategy at the broker Stifel, said the risks of another market plunge would continue until the Fed relented from its current push to tighten monetary policy.
“The Fed is making a monumental mistake,” he said on Wednesday. “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.”