Dow notches record point surge in rebound

Lewis Krauskopf
(Australian Associated Press)

 

The Dow Jones Industrial Average has surged at least 1000 points in a single session for the first time in a broad stock rebound after the benchmark S&P 500 index was on the brink of a bear market.

The three major US indexes all posted their biggest one-day percentage gains since March 2009, in the first day of trading following the Christmas holiday, when the market was closed.

Sales in the 2018 US holiday shopping season rose 5.1 per cent to over $US850 billion, the strongest in six years, according to a Mastercard report. The S&P 500 retailing index jumped 7.4 per cent, while shares of online retailer Amazon, which touted a “record-breaking” season, climbed 9.4 per cent.

Oil prices also surged, boosting sentiment for risk assets such as stocks, while underpinning a 6.2 per cent gain for energy shares.

Stocks found their footing after wobbling in morning trade. The S&P 500 came within 2 points of falling 20 per cent from its late-September closing high, a threshold 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.”

The Dow Jones Industrial Average rose 1086.25 points, or 4.98 per cent, to 22,878.45, the S&P 500 gained 116.6 points, or 4.96 per cent, to 2467.7 and the Nasdaq Composite added 361.44 points, or 5.84 per cent, to 6554.36.

The previous record point gain for the Dow was 936.42 on October 13, 2008, when markets were whipsawed almost daily by developments in the financial crisis, which was then in full swing. Over the two sessions following that gain, the Dow dropped more than 800 points.

 

 

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