Dow rebounds with record 1-day gain

The coal that was left in the market's stocking on Christmas Eve turned to gold on Wednesday, as the Dow Jones Industrial Average soared by more than 1,000 points for its largest one-day point gain ever.

Holiday shoppers played the part of Santa Claus, with retail sales for the season rising 5.1 percent to more than $850 billion, the best showing in six years, according to a Mastercard report.

The muscular showing by consumers helped ease anxiety amid talk of a global slowdown and personnel changes at the White House.

Other key factors were West Texas Intermediate crude oil rebounding to above $44 a barrel and concerns about the Federal Reserve being eased.

There also were signs of a thaw on trade between China and the US.

As reported in China Daily on Wednesday, Beijing made a move to standardize regulations in a transparent way and help level the playing field for foreign enterprises and private firms. As part of opening-up, the shortened Market Access Negative List is expected to make it easier for all market players to invest in China.

Also, an American trade team will travel to Beijing the week of Jan 7 to hold talks with Chinese officials, Bloomberg reported. The delegation will be led by Deputy US Trade Representative Jeffrey Gerrish and will include David Malpass, Treasury undersecretary for international affairs.

The three major US indices all posted their biggest one-day percentage gains since March 2009 on Wednesday.

By 4 pm New York time, the Dow had risen 1,086.25 points, or 4.98 percent, to 22,878.45; the S&P 500 gained 116.6 points, or 4.96 percent, to 2,467.7, and the Nasdaq Composite added 361.44 points, or 5.84 percent, to 6,554.36.

The previous record one-day point gain for the Dow was 936.42 on Oct 13, 2008, when markets were whipsawed almost daily by developments in the financial crisis.

What's stunning about Wednesday's rally is that it followed a 653-point drop on the Dow on Monday, the worst Christmas Day showing in history. The market was closed on Christmas.

Each member of the FAANG (Facebook, Amazon, Apple, Netflix, Google) tech collection rallied at least 6.4 percent.

The S&P 500 retailing index jumped 7.4 percent, while shares of online retailer Amazon climbed 9.4 percent as the Seattle giant talked of a "record-breaking" holiday season.

"It's a phenomenal move when you consider the market was actually down around midday," Kamal Khan, US editor at Investing.com, told China Daily. "Retail was a big winner with Amazon up 9%, helping both the S&P and the Nasdaq. There was also a fear-of-missing-out effect as the buying accelerated into the close."

Small caps joined the rally with a 5 percent advance.

Oil prices also had their best rally since 2016, boosting sentiment for risk assets such as stocks.

It wasn't such a pleasant start for stocks in the morning, though. The S&P 500 came within 2 points of falling 20 percent from its late-September closing high, a level commonly used to define a bear market.

"The market is extremely oversold where we left it" on Monday, said Brett Ewing, chief market strategist at First Franklin Financial Services in Tallahassee, Florida. "You cannot make the assumption that this correction is over, but today's action is definitely a very positive signal."

US President Donald Trump said on Tuesday that the rout that knocked stocks down 19.8 percent provided a "tremendous opportunity to buy".

Investors also welcomed the words of Kevin Hassett, chairman of the White House Council of Economic Advisers, who said Fed Chairman Jerome Powell's job is "100 percent" safe.

"The thing that the Fed chairman won't be axed, that has a lot to do with everyone being happy Powell gets to keep his job and that the turmoil about this has abated for today," Forrest said. "You have the market leaning one way or the other, and it can often do what it's doing today, which is go higher. On Monday, the market leaned lower. It's an outsize move."

Hassett was the latest government official to try to calm the markets after Bloomberg's report Friday that Trump asked about firing Powell. Treasury Secretary Steven Mnuchin was criticized for saying he called bank chiefs to gauge liquidity. Trump expressed confidence in Mnuchin yesterday.

"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."

Reuters and Bloomberg contributed to this story.

Contact the writer at williamhennelly@chinadailyusa.com