Broad rally boosts U.S. stocks

A broad rally on Wall Street pushed stocks higher Thursday, giving the S&P 500 its best day in seven weeks as the market recouped some of its losses after a several days of volatile trading.

The benchmark index rose 1.4%, its biggest gain since mid-october. The Dow Jones Industrial Average rose 1.8%, its best showing since early March. The tech-heavy Nasdaq rose 0.8%, held back in part by a modest drop in Apple.

Smaller company stocks, which have lost the most ground this week, outpaced the broader market, sending the Russell 2000 index 2.7% higher.

The market rebound comes as investors try to gauge the amount of damage the omicron variant of COVID-19 might inflict on the economy, as well as measures that the U.S. and other governments are taking to restrain it. Trading has been choppy all week and, despite the latest gains, every major index is on track for a weekly loss.

The heavy selling in recent days may have presented too tempting an opportunity for traders, said said Jay Hatfield, CEO of Infrastructure Capital Advisors.

“It’s bargain-hunting after an overreaction,” Hatfield said. “Clearly the Fed and the variant are overhanging on the market, but the fundamentals are very strong. And the Fed is still injecting liquidity into the market.”

The S&P 500 rose 64.06 points to 4,577.10. The index has been on a roller coaster ride throughout the week. It was up as much as 1.9% Wednesday before skidding and closing 1.2% lower.

The Dow gained 617.75 points to 34,639.79. The Nasdaq added 127.27 points to 15,381.32. The Russell 2000 picked up 58.91 points to 2,206.33.

The latest coronavirus variant has led countries to impose barriers to travel and stricter restrictions on business and people. Concerns about global restrictions potentially crimping economic growth butted up against concerns about rising inflation this week. The persistence of rising inflation has prompted the Federal Reserve to consider withdrawing stimulus measures sooner than expected.

Wall Street likely will remain jumpy until investors have more information on how contagious the new variant is and how well current vaccines will hold up against it.

More than 90% of companies in the S&P 500 index rose Thursday. Banks and other financial companies accounted for a big slice of the gains.