Dow ends up 166 as U.S. oil beats Brent
Stocks rose Tuesday as Wall Street built on Monday's rebound rally and made a late-year push to avoid the first down year for the Dow since 2008.
The Dow Jones industrial average ended up about 166 points, or 1%. The Standard & Poor's 500 finished 0.9% higher and the Nasdaq composite gained 0.7%.
The rally was helped by gains in energy stocks as oil prices rose and U.S. benchmark crude traded at a premium to Brent crude for the first time since January, with West Texas Intermediate oil trading as much as 4 cents higher than Brent in London, according to Bloomberg.
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But stocks were still down for the year. Heading into Tuesday's trading session, the Dow was down 3.2% for the year, putting the blue-chip stock gauge on track for its first losing year since 2008, when it plunged nearly 34% in the throes of the worst financial crisis since the Great Depression.
Going in to Wednesday's session, the blue chips are 2.3% negative for 2015.
The Dow is still trying to rebound from a 621 point, or 3.5%, drop in a two-session sell-off on the final two trading days of last week. That sell-off followed the Federal Reserve's first interest rate hike in nearly a decade last Wednesday and continued turbulence in the energy markets, where U.S. based crude tumbled below the key $35 a barrel level.
The Dow has finished up or down more than 100 points in eight straight sessions now.
Wall Street is currently digesting the impact of the Fed rate hike on future economic growth in the U.S., stock valuations and on the value of the U.S. dollar, which has strengthened in 2015, making U.S. multinationals less competitive.
But stock investors are still hoping for a year-end rally, a seasonal stock market quirk that typically occurs at the end of a calendar year. Monday's rally renewed hopes that a late-year rally could ensue and give the Dow and the broader Standard & Poor's 500 stock index a shot at climbing back into positive territory for the year. The S&P 500 kicked off Tuesday down 1.8% for the year.
But an analysis by Ed Yardeni, chief investment strategist at Yardeni Research, heading into the week noted that the "odds" of U.S. stocks finishing the year in the black were "low," if history is a guide. Heading into the week, the broad U.S. market was down around 2.6% in 2015. And Yardeni's research found that in the final eight days of the year going back to 1928, the S&P 500 only rallied 2.7% or more just 15 times, or 17% of the time.
In economic news:
• Sales of existing homes tumbled 10.5% in November to the lowest level in 19 months. The National Association of Realtors placed some of the blame in the drop on a change in federal closing rules that may have lengthened closing times.
Home sales drop sharply in November as closing process lengthens
• The third and final reading on third-quarter U.S. economic growth, or GDP, ticked down to 2% from 2.1%, but a tad higher than Wall Street expectations of 1.9%.
Global markets were mixed Tuesday. In Europe the broad Stoxx Europe 600 was down less than 0.1% and the CAC 40 in Paris was up 0.1%. The German DAX was down 0.1%
In Asia, Japan's Nikkei 225 closed down 0.2%, but shares of Hong Kong's Hang Seng index rose 0.2% and stocks in mainland China's Shanghai composite rose 0.3%.
Adam Shell on Twitter: @adamshell.