US stocks rebound as traders return from Christmas holiday

Investors returned from the Christmas holiday break in a buying mood Wednesday, sending U.S. stocks sharply higher and placing the market on track for its best day in nine months.

Gains in technology companies, retailers, health care and internet stocks drove the broad rally, which erased much of the market’s losses from a steep drop on Monday. That sell-off left the benchmark S&P 500 index on the edge of what Wall Street calls a bear market.

“This is a market that’s heavily oversold, and typically you expect a strong bounce following that,” said Quincy Krosby, chief market strategist at Prudential Financial. “Oil prices have just moved quite markedly. And retail is having a very strong holiday season.”

The S&P 500 index rose 59 points, or 2.5 per cent, to 2,410 of 12:55 p.m. Eastern Time. The Dow Jones Industrial Average climbed 521 points, or 2.4 per cent, to 22,338. The tech-heavy Nasdaq gained 215 points, or 3.5 per cent, to 6,408. The Russell 2000 index of smaller-company stocks picked up 30 points, or 2.4 per cent, 1,297.

Trading volume was lighter than usual following the Christmas holiday. Markets in Europe, Hong Kong and Australia were closed.

U.S. crude oil prices were on track for their biggest one-day gain in more than two years.

Benchmark U.S. crude climbed 7.5 per cent to $45.73 a barrel in New York. Brent crude, used to price international oils, gained 6.9 per cent to $54.26 a barrel in London.

The pickup in oil prices helped boost energy stocks. Marathon Petroleum rose 4.2 per cent to $56.62.

Wednesday’s gains provide the S&P 500 some breathing room after finishing the shortened trading session Monday just shy of a 20-per cent drop from its peak three months ago. Should the index cross that threshold and slide into a bear market, it would mark the end to the longest bull market for stocks in modern history after nearly 10 years.

Stocks fell sharply Monday after President Donald Trump lashed out at the central bank. Administration officials had spent the weekend trying to assure financial markets that Fed chairman Jerome Powell’s job was safe. On Tuesday, Trump reiterated his view that the Federal Reserve is raising interest rates too fast, but called the independent agency’s rate hikes a “form of safety” for an economy doing well.

“The market is trying to find an equilibrium between earnings, revenue growth and the economy, but when you have an onslaught of headlines that just manifest uncertainty from Washington, it just feeds negative sentiment,” Krosby said.

The market’s sharp downturn since October intensified this month, erasing all of its 2018 gains and nudging the S&P 500 closer to its worst year since 2008. Despite Wednesday’s rally, stocks are on track for their worst December since 1931, during the depths of the Great Depression.

Technology stocks accounted for much of Monday’s early bounce. Adobe rose 6.1 per cent to $217.68. Payment processors Visa and Mastercard also headed higher. Visa added 4.5 per cent to $127.24, while Mastercard gained 4.2 per cent to $182.05.

Big retailers were among the gainers. Amazon climbed 6.9 per cent to $1,436.09. Kohl’s gained 7.3 per cent to $64.18. Nordstrom picked up 4.4 per cent to $46.13.

Homebuilders mostly rebounded after an early slide following a report indicating that annual U.S. home price growth slowed in October. PulteGroup climbed 1.1 per cent to $24.96.

Bond prices fell. The yield on the 10-year Treasury note rose to 2.78 per cent from 2.75 per cent late Monday.

The dollar strengthened to 110.98 yen from 110.41 yen on Monday. The euro weakened to $1.1361 from $1.1404.

The partial U.S. government shutdown that started Saturday is unlikely to hurt the economy much, although it may deprive the financial markets of data about international trade and gross domestic product. The Bureau of Economic Analysis said Wednesday that it’s required to suspend all operations until Congress approves funding, which means that the government might not release its fourth-quarter report on gross domestic product as scheduled for January 30.

In other trading Wednesday, South Korea’s Kospi gave up 1.3 per cent, while Japan’s Nikkei 225 index, which plunged 5 per cent on Tuesday, picked up 0.9 per cent. Shares fell in Taiwan, Singapore and Indonesia, but rose in Thailand.

Get local stories you won't find anywhere else right to your inbox.
Sign up here

Just Posted

Cilantro and Chive was voted in the top three in no less than 13 different categories in the 2020 Best of Lacombe Readers Choice Awards. Photo by Megan Roth/Lacombe Express
Cilantro and Chive opening in Red Deer

There will now be two Cilantro and Chive locations. The restaurant announced… Continue reading

People wear face masks as they wait to enter a store in Montreal on October 24, 2020, as the COVID-19 pandemic continues in Canada and around the world. THE CANADIAN PRESS/Graham Hughes
Canadian provinces hardest hit by COVID-19 reach sobering milestones

MONTREAL — The Canadian provinces hardest hit by the global COVID-19 pandemic… Continue reading

Prime Minister Justin Trudeau looks on as Deputy Prime Minister and Finance Minister Chrystia Freeland responds to a question during a news conference on Parliament Hill in Ottawa, Tuesday, Aug. 18, 2020. THE CANADIAN PRESS/Adrian Wyld
Federal study details workers hit hardest by tax, benefit system for extra earnings

OTTAWA — Newly released documents show Finance Department officials calculated that workers… Continue reading

Cenovus. (The Canadian Press)
Cenovus to buy Husky Energy in deal valued at $23.6B, company will remain in Alberta

CALGARY — Cenovus Energy Inc. is buying Husky Energy Inc. in an… Continue reading

test tube with the blood test is on the table next to the documents. Positive test for coronavirus covid-19. The concept of fighting a dangerous Chinese disease.
The latest numbers on COVID-19 in Canada for Sunday, Oct. 25, 2020

The latest numbers of confirmed COVID-19 cases in Canada as of 10:49… Continue reading

B.C. Liberal leader Andrew Wilkinson, B.C. NDP leader John Horgan and B.C. Greens leader Sonia Furstenau. (Black Press Media)
VIDEO: One day until B.C. voters go to the polls in snap election defined by pandemic

NDP Leader John Horgan’s decision to call an election comes more than a year ahead of schedule and during a pandemic

Alice Kolisnyk, deputy director of the Red Deer Food Bank, says the agency expects an increase in demand as the COVID-19 pandemic continues. Every new subscription to the Red Deer Advocate includes a $50 donation to the food bank. (Photo by BYRON HACKETT/Advocate Staff)
Support the food bank with a subscription to the Red Deer Advocate

The community’s most vulnerable members are always in need of a hand,… Continue reading

NDP Leader John Horgan celebrates his election win in the British Columbia provincial election in downtown Vancouver, B.C., Saturday, Oct. 24, 2020. THE CANADIAN PRESS/Jonathan Hayward
John Horgan says he will work across party lines to find ideas that work for B.C.

VICTORIA — British Columbia’s election results show a divided province with Liberal… Continue reading

President Donald Trump gestures from the top of the steps of Air Force 1 at Andrews Air Force Base, Md., Wednesday, Oct. 21, 2020. When people in the United States talk about moving to Canada to escape four more years of Donald Trump, it’s usually either a punchline or a pipe dream. THE CANADIAN PRESS/AP-Susan Walsh
Move to Canada? A pipe dream for some Americans is a parachute for Canadian expats

WASHINGTON, Wash. — When people in the United States talk about moving… Continue reading

The Cogeco logo is seen in Montreal on Thursday, October 22, 2020. THE CANADIAN PRESS/Paul Chiasson
Five things to watch for in the Canadian business world in the coming week

TORONTO — Five things to watch for in the Canadian business world… Continue reading

President Donald Trump, left, and Democratic presidential candidate former Vice President Joe Biden during the second and final presidential debate Thursday, Oct. 22, 2020, at Belmont University in Nashville, Tenn. Stock market investors are breathing a little easier despite potentially facing higher taxes as the possibility of a contested U.S. presidential election appears to be fading, say investment experts. THE CANADIAN PRESS/AP, Patrick Semansky
Markets concerns about contested U.S. election fading with Biden lead in polls

TORONTO — Stock market investors are breathing a little easier despite potentially… Continue reading

(File photo)
Ontario records more than 1,000 new daily COVID-19 cases for first time

Ontario is reporting more than 1,000 mew daily cases of COVID-19 for… Continue reading

Pope Francis delivers his message during the Angelus noon prayer from the window of his studio overlooking St.Peter's Square, at the Vatican, Sunday, Oct. 25, 2020. (AP Photo/Alessandra Tarantino)
Pope names 13 new cardinals, includes US Archbishop Gregory

VATICAN CITY — Pope Francis on Sunday named 13 new cardinals, including… Continue reading

Dave Mercer, President of Unifor Local 2121, overlooks Conception Bay, Newfoundland and Labrador and the Terra Nova floating production vessel that is anchored there on Friday, October 23, 2020. THE CANADIAN PRESS/Paul Daly
As N.L.’s oil industry sputters, the emotional toll of the cod moratorium looms large

ST. JOHN’S, N.L. — Dave Mercer spent the early 1990s roaming around… Continue reading

Most Read