Dow Jones soars 1,086 points in largest single-day increase

Specialist Meric Greenbaum works the floor Friday at the New York Stock Exchange

Specialist Meric Greenbaum works the floor Friday at the New York Stock Exchange

The Dow Jones rose nearly 5 per cent, or 1086.25 points, to 22,878.45, erasing losses from the Christmas Eve slump.

Technology companies and health care stocks, big gainers on Wednesday when the market had its best day in 10 years, took some of the heaviest losses in the broad slide.

The market's gyrations have resulted in unusual volatility for the final days of the year.

Stocks have been in a downward spiral with the Dow and S&P 500 down more than 12 percent this month - on track for their worst December performances since the Great Depression in 1931.

Still, world stocks stayed off near two-year lows, lifted by Wednesday's 1,000 point-plus surge on the U.S. Dow Jones index which was triggered partly by the strongest holiday sales in years.

All three major USA indexes - Dow, S&P and Nasdaq - finished down 2 percent or more on Christmas Eve. The S&P was up four percent Wednesday while the Nasdaq rose 4.8 percent. Stocks were buoyed by gains in tech and retail sectors, as well as a rise in crude oil prices, which jumped 9 percent after weeks of declines. Nasdaq rose 5.8 percent or 361 points to 6,554.

The Dow Jones gained 5 percent or 1,086 points to 22,878.

December is typically a buoyant month for stocks. Some suggest focusing on stocks from emerging markets, where proponents say particularly sharp drops in price have left them looking cheap.

The S&P 500 is up 41 points or 1.7 percent to 2,391 at midday.




Adding to investors' fears, Treasury Secretary Steven Mnuchin made an unusual announcement that major USA banks had "ample liquidity", adding confusion about banks' health to already volatile market conditions.

"The market was pressured by worries over Washington, the Fed and the threat of the trade war sparking a global recession", said Sam Stovall, chief investment strategist at CFRA Research.

On Thursday, some of the market's big winners the prior day lost ground. Futures on the S&P 500 had lost 43 points of the previous session's 129-point advance as of 7:16 a.m.in NY. Havens came back in vogue, with Treasury 10-year yields slipping below 2.8 per cent, and gold climbing with the yen.

Oil, which soared a stunning 8.7 percent in Wednesday's session, retreated almost 3 percent in late morning trades taking energy stocks such as Exxon Mobil and Chevron down with it. The S&P 500 index soared about 5 percent.

Elsewhere, WTI crude oil prices gave up a slice of the more than 8 per cent gain from the previous day.

The dollar strengthened to 111.36 yen from 110.41 yen on Monday. The euro weakened to $1.1387 from $1.1404.

The markets were rattled by an unprompted announcement by Treasury Secretary Steven Mnuchin over the weekend that the USA banking system was solid.

Canada's TSX index, closed for trading Wednesday due to the Boxing Day holiday, was down 16.8 per cent from its all-time high, set in July. The FTSE was down 1.6% and Germany's DAX fell 2.7%.

In Asian markets, the Nikkei 225 index rebounded 3.9 percent, while South Korea's Kospi was little changed.

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