Dow rebounds over 1000 points

Stocks have climbed back from their epic Christmas Eve plunge as all three indexes posted big gains.

The Dow Jones industrial average roared more than 1050 points in late afternoon – almost 5 per cent – as stocks snapped a four-day losing streak that had placed the 10-year bull market on the edge of death on Monday.

‘‘Today the market’s message is that we have nothing to fear but fear itself,’’ said Ed Yardeni, president of Yardeni Research. ‘‘The recent sell-off reflected fears of an impending recession which were blown away today by Amazon and other retailers reporting a record holiday selling season. Santa is back.’’

White House economic adviser Kevin Hassett tried to bring some calm to the markets earlier on Wednesday when he assured reporters that Federal Reserve Chairman Jerome H Powell’s job is ‘‘100 per cent safe’’. The market started surging after his remarks.

‘‘Yes, of course, 100 per cent,’’ said Hassett, the chairman of the president’s Council of Economic Advisers, when asked by reporters at the White House if Powell’s job is safe. ‘‘Absolutely’’.

Hassett, in an appearance on Fox Business Network, also said US President Donald Trump ‘‘is very happy’’ with Treasury Secretary Steven Mnuchin. Mnuchin created concerns last weekend when he phoned the chief executives of US banks regarding the economy.

Trump’s criticism of the Fed and Powell has shaken Wall Street as it weathers its worst December in history.

The Dow was whirling between slightly negative to 200 points up in the first hours of Wednesday’s session before its early afternoon lift on the tails of surging blue chips Apple, Home Depot, Microsoft, Visa and Nike. Facebook and Amazon shares were up more than 6 per cent each.

All three major indexes were on pace to snap a four-day losing streak. The S&P 500 and technology-heavy Nasdaq Composite also bounced. The Nasdaq was up more than 5 per cent and the S&P posted a nearly 5 per cent per cent pop by closing.

Crude oil prices surged, posting their biggest increase in two years after a 30-per cent plus drop since October. West Texas Intermediate crude was up nearly 10 per cent at around US$46 (NZ$68) per barrel. Benchmark Brent crude increased more than 8.5 per cent to more than US$54 per barrel.

The post-holiday rally comes after a shortened Christmas Eve trading session left the Nasdaq deep into correction territory, and the S&P within a wisp of a correction.

The near-decade long bull market that began in March 2009 earned a reprieve on Wednesday’s rally. Consumer discretionary, energy and technology were leading the way.

Washington Post