By Fred Imbert and Eustance Huang
Stocks posted their best day in nearly a decade on
Wednesday, with the Dow Jones Industrial Average notching its largest one-day
point gain in history. Rallies in retail and energy shares led the gains, as
Wall Street recovered the steep losses suffered in the previous session.
The 30-stock Dow closed 1,086.25 points higher, or 4.98
percent, at 22,878.45. Wednesday’s gain also marked the biggest upside move on
a percentage basis since March 23, 2009, when it rose 5.8 percentage points.
The S&P 500 also
catapulted 4.96 percent — its best day since March 2009 — to 2,467.70 as the
consumer discretionary, energy and tech sectors all climbed more than 6
percent. The Nasdaq
Composite also had its best day since March 23, 2009, surging 5.84
percent to 6,554.36.
Wednesday also marked the biggest post-Christmas rally
for U.S. stocks ever.
Retailers were among the best performers on Wednesday,
with the SPDR S&P Retail ETF (XRT) jumping 4.7 percent. Shares of Wayfair,
Kohl’s and Dollar General all rose more than 7 percent. Data released by
Mastercard SpendingPulse showed retailers were having their best holiday season in six years. Amazon’s stock also jumped
9.45 percent, snapping a four-day losing streak, after the company said
it sold a record number of items this holiday season.
Energy stocks also jumped as U.S. crude oil prices catapulted more than 8 percent. Shares of
Marathon Oil and Hess were the best performers within the energy sector,
jumping 11.9 percent and 11 percent, respectively.
John Augustine, chief investment officer at Huntington
Private Bank, said he welcomed Wednesday’s rally but added: “We still have a
ways to go. We need to have three days of moving higher into the close to stem
this wave of selling.”
A strong sell-off on Monday sent the major indexes down
more than 2 percent and ended with the S&P 500 falling into a bear market.
Monday’s pullback was also the worst Christmas Eve decline ever. The S&P
500 was down 20.06 percent from an intraday record high set on Sept. 21 before
Wednesday’s sharp rebound. U.S. exchanges were closed Tuesday for the Christmas
holiday.
The recent decline in stocks “is a buyer’s strike due to
lack of confidence in policymakers around the world,” said Augustine. “It’s
going to take a long time to recover that confidence.”
The plunge in stocks on Monday came after Treasury
Secretary Steven Mnuchin held calls with CEOs of major U.S. banks last weekend and issued a statement
saying, “The banks all confirmed ample liquidity is available for lending to
consumer and business markets.”
Monday’s move lower also came after President Donald Trump commented
on the Federal Reserve once more, calling it “the only problem our economy has”
in a tweet. Trump also said Tuesday the Fed was “raising interest rates too fast because they think the economy is so
good. ” Trump has been critical of the Fed’s decisions regarding monetary
policy this year. The central bank has hiked overnight rates four times this
year.
“With the end of the quarter, we could get a bounce in
the next few days,” said Peter Cardillo, chief market economist at Spartan
Capital Securities. But “the problem is [President Donald] Trump continues to
create a lot of uncertainty. We can’t focus on the fact there are a lot of good
bargains out there.”
This is all taking place amid an ongoing government
shutdown that started last week. The Trump administration and congressional
leaders are at a stalemate over funding for a wall along the U.S.-Mexico
border. The administration says the wall is important for national security
while opponents of the barrier note it will not solve the U.S.′ immigration
issues.
“Government shutdown starts with no end game strategy by
either side,” L. Thomas Block, Washington policy strategist at Fundstrat Global
Advisors, said in a note to clients. “The President ... remains convinced that
fighting for HIS wall is worth a government shutdown and his base loves the
confrontation.”
—CNBC’s Robert Hum, John Melloy and Michael
Sheetz contributed to this report.
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RELATED STORIES
U.S. Holiday Retail Sales Are Strongest in
Years, Early Data Show
By Sarah Nassauer
Sales excluding autos rose 5.1% between Nov. 1 and Dec. 24 from a
year earlier, according to Mastercard
An
outlet store in Castle Rock, Colo., on Christmas Eve. Shoppers flocked to
stores, fueling the biggest holiday sales increase tracked by Mastercard in six
years. PHOTO: DAVID ZALUBOWSKI/ASSOCIATED PRESS
Shoppers delivered the strongest holiday sales increase
for U.S. retailers in six years, according to early data.
Total U.S. retail sales, excluding automobiles, rose 5.1%
between Nov. 1 and Dec. 24 from a year earlier, according to Mastercard SpendingPulse, which
tracks both online and in-store spending with all forms of payment. Overall,
U.S. consumers spent over $850 billion this holiday season, according to
Mastercard.
The figures suggest a stock-market swoon and partial
government shutdown haven’t curbed consumer confidence and spending.
“Wall Street is running around like a chicken with its
head cut off, while Mr. and Mrs. Main Street are happy with their jobs,
enjoying their best wage increases in a decade,” said Craig Johnson, president
of Customer Growth Partners, a retail research and consulting firm. A recent
drop in gas prices has helped last-minute spending, he said.
Sales have been generally strong throughout the holiday
season, led
by increases in online shopping. Retailers entered the holidays with
momentum as online
sales jumped 26.4% from a year earlier between the Wednesday before
Thanksgiving through Black Friday, one sign of an early buying surge, according
to Adobe Analytics.
Buying slowed in early December in part because an
unusually early Thanksgiving made it harder for retailers to sustain sales
through the entire holiday shopping period, analysts and consultants said. But
shoppers picked up the pace ahead of Christmas.
With Christmas Eve falling on a Monday, many retailers
geared up to capitalize on a last-minute push from shoppers who were counting
on the final weekend to wrap up their gift-buying.
Chains including Walmart Inc. and Target Corp. extended deadlines
to get online orders delivered before Christmas, while Amazon.com Inc. in some cities
offered Prime members the option of free same-day delivery on Christmas Eve.
Many retailers also touted the option to buy online and
pick up in store through Christmas Eve. Overall, sales in that category
increased 47% from Nov. 1 to Dec. 19, according to Adobe.
Mastercard found that sales from online shopping grew
19.1% between Nov. 1 and Dec. 24 compared with the year-earlier period.
Still, next year presents a challenging environment as
buying continues to shift online—a trend that is hurting many retailers,
including department stores.
Sales at department stores fell 1.3% in the period
tracked by Mastercard, in part due to store closings. Stores that mainly sell
apparel, however, experienced robust sales, growing 7.9% during the same
period. Overall, sales from bricks-and-mortar stores rose 3.3%.
“We have seen some things really solidify” amid a strong
economy and many retailers making investments to grow online, said Steve Barr,
consumer markets leader at consulting firm PwC. But this holiday season shows
that “the pace of change to online, especially mobile, is really not easing
up,” he said.
Some retail clients are cautious about next year, Mr.
Barr added.
“While we haven’t seen the consumer retreat, I do think
there is a heightened risk with volatility in the capital markets and rising
interest rates and uncertainty in Washington, D.C.,” Mr. Barr said. “Retailers
are a bit on edge about what 2019 might be.”
______________________
Low gas prices are leading to record holiday
travel.
BY JULIANNA RENNIE
As Americans ring in the new year, they may find
themselves with some extra cash thanks to savings at the pump.
Gas prices have been steadily falling since October and
continue to drop.
On Christmas Eve, the national average was $2.322 per
gallon, setting a low for 2018, according to AAA.
In North Carolina, the average was $2.204 per gallon —
more than $0.12 cheaper than this time last year, AAA reports.
The Charlotte area has among the cheapest gas prices in
the state, where many last-minute shoppers will fill up their tanks for less
than $2 per gallon.
…
