'Christmas Miracle': US Stock Market Experiences Record Rally a Day After Fall

Wednesday's rally comes two days after stocks were routed on a disastrous Christmas Eve that saw the Dow and the Nasdaq suffer their worst-ever losses in December 24 trading. Kohl's jumped 5.6 percent. The benchmark S&P 500 index also gained 5 per cent and the technology heavy Nasdaq rose 5.8 per cent. The Nasdaq Composite is now 22 percent below its record reached in August and is in a bear market.

One thing's for sure, for investors starved of good news all month, Wednesday brought it coursing back in a flurry.

Factor in momentum building behind fallen angels such as FAANG (Facebook, Apple, Amazon, Netflix, Alphabet's Google) names throughout the session, spurred in part by Amazon saying it had a "record breaking" holiday season, and you get the makings of a borderline insane 1,086 up day for the Dow. Consumers boosted their spending this holiday season.

That overshadowed positive noises from the USA government on trade talks with Beijing, its efforts to temper the White House's recent broadsides against the Federal Reserve and a Mastercard Inc report that US holiday shopping sales had risen the most in six years in 2018. And a almost 9% rise in oil prices offered a respite for shares of beaten-down energy companies.

US crude oil prices surged, on track for their biggest one-day gain in more than two years.

Monday morning's drop in USA financial markets began after Trump tweeted about the Fed. The stocks saw their worst December and worst Christmas on record. The Nasdaq and S&P 500 achieved similar daily gains, notching their most impressive rallies since March 2009. Britain's FTSE 100 fell 1.1 percent.

USA stocks had plummeted before Christmas after President Donald Trump anxious investors by criticizing the U.S. central bank, but strong holiday sales helped relieve concerns about the state of the U.S. economy.

The S&P 500, which also touched bear territory on Monday, traded a bit higher, in tandem with the Dow. The Federal Reserve is raising interest rates - it indicated two more increases may arrive in 2019 following four this year- and other central banks are stepping off the accelerator on stimulus for their economies, which remove big supports. In his latest tweet, Trump likened the Fed to "a powerful golfer who can't score".

"The only problem our economy has is the Fed". For some, like the entire Democratic Party establishment, they want one in order to hurt Trump.

"Having said that", Hooper said, "the Fed should be more flexible regarding balance sheet normalization, given how powerful a tool it is".

"The Fed is engaged in the unprecedented experiment of simultaneously unwinding its balance sheet and "normalizing" interest rates", the article said, adding that the consequences were hard to predict. Markets in Australia and Hong Kong were closed. It said US shoppers spent more than $850 billion this year, both online and offline.

"I have great confidence in our companies", he told reporters on Tuesday, according to a Reuters report.

  • Zachary Reyes