U.S. stocks roar back from bear brink; crude rises

AFTER NEARLY A WEEK of collapsing stock prices, investors were cheered by a significant gain in U.S. equity markets partway through Wednesday trading. / BLOOMBERG NEWS FILE PHOTO/MICHAEL NAGLE
AFTER NEARLY A WEEK of collapsing stock prices, investors were cheered by a significant gain in U.S. equity markets partway through Wednesday trading. / BLOOMBERG NEWS FILE PHOTO/MICHAEL NAGLE

NEW YORK – U.S. stock markets remained volatile, with the Standard & Poor’s 500 index staging a furious rally a day after dropping to the brink of a bear market.

The benchmark for American equities powered to its first advance in five days, driven by Amazon.com’s 5 percent rally on record holiday sales. President Donald Trump said it is a “tremendous opportunity to buy” after the index suffered its worst pre-Christmas slump on record. Investors also welcomed Kevin Hassett’s assurance that Jerome Powell’s job is “100 percent” safe. Oil’s best rally since 2016 added to the equity surge.

Stocks are looking to provide a rare bright spot in one of the most miserable Decembers on record for equity investors, as a host of headwinds combined to drag down America’s benchmark index. Year-end and Christmas disruption have arrived just as fears of a global slowdown and personnel churn in the U.S. administration sap confidence. Volume was in-line with the 30-day average at this time of day.

Hassett was the latest government official to try to calm the markets after Bloomberg’s report Friday that President Donald Trump asked about firing Powell. Steven Mnuchin was criticized for saying he called bank chiefs to gauge liquidity. Trump expressed confidence in Mnuchin yesterday, but CNN reported the Treasury secretary’s job is in jeopardy.

- Advertisement -

“These are incredibly tricky markets to decipher, as the outsized moves are not reflective of the current U.S. economic landscape,” said Stephen Innes, head of Asia-Pacific trading at Oanda Corp. in Singapore. “But that seems to matter little so far, as fear mongering continues to permeate every pocket of global capital markets.”

Crude surged, the greenback was slightly stronger versus its major peers and Treasuries slipped. Exchanges throughout Europe remained closed for the holiday.

Elsewhere on Wednesday, Japanese equities closed higher on a wave of late buying after fluctuating throughout the day. Korean shares tumbled after a holiday, and Shanghai stocks fell for a second day. Markets in Australia and Hong Kong were closed.

West Texas Intermediate crude rebounded to trade above $44 a barrel. The offshore yuan was little changed after China released new rules promising to treat all companies equally, the latest positive step on the trade and investment front since further U.S. and Chinese tariff hikes were paused.

“There’s a lot of uncertainty in the short-term, and that makes sense,” Gershon Distenfeld, AllianceBernstein co-head of fixed income, said on Bloomberg TV. “We’re going to have a lot of volatility. But this base case of ’the world is coming to an end’ just given the fundamental data out there doesn’t make any sense.”

Here are some events investors may focus on in coming days:

U.S. new-home sales are due Thursday. Baker Hughes releases its weekly data on active U.S. oil rigs on Friday. Monday is year end. Brazil’s new president is sworn in on Tuesday.

And these are the main moves in markets:

Stocks

The S&P 500 index rose 2.2 percent as of 12:29 p.m. New York time, the biggest gain since November. The Nasdaq 100 surged 3 percent and the Dow Jones Industrial Average was little changed. The MSCI Asia Pacific Index gained 0.2 percent, the first advance in a week and the biggest rise in more than a week. The MSCI Emerging Market Index fell 0.5 percent, hitting the lowest in eight weeks with its fifth consecutive decline. Topix index increased 1.1 percent, the first advance in more than a week and the biggest climb in two weeks.

Currencies

The Bloomberg Dollar Spot Index climbed 0.1 percent. The euro fell 0.1 percent to $1.1386. The British pound gained less than 0.05 percent to $1.2677. The Japanese yen weakened 0.3 percent to 110.62 per dollar, the first retreat in almost two weeks.

Bonds

The yield on 10-year Treasuries gained one basis point to 2.75 percent.

Commodities

West Texas Intermediate crude gained 1.7 percent at $43.27 a barrel. Gold gained 0.3 percent to $1,271.89 an ounce.

Vildana Hajric and Jeremy Herron are Bloomberg News staff writers.

No posts to display