Dow up 193 as S&P 500 turns positive for 2015
Stocks jumped Tuesday as traders remain hopeful that a year-end Santa Claus rally will finally push the major indexes back into positive territory for the year and avoid Wall Street's first down year since 2008.
After two straight days of modest declines, the Dow Jones industrial average ended up 193 points, or 1.1%, to 17,720.98. The Standard & Poor's 500 stock index gained 1.1% to 2078.36 as the broad-based index surpassed its 2014 close of 2058.90 and returned into positive territory for the year. The Nasdaq composite rose 1.3% to 5107.94.
Investors remain cautious though, as the so-called Santa Claus rally -- a seasonal phenomenon coined by the Stock Trader's Almanac when the broad U.S. stock market rallies roughly 1.5% in the final five trading days of the year and the first two trading days of the new year -- has still not completely taken flight. The Dow tumbled 74 points, or 0.4%, in the first two days of the Santa Claus rally period, and the S&P 500 dropped 0.4%. Today's gains have erased those earlier losses.
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Wall Street is hoping that a year-end rally sticks, because if it does not, there's a good chance that both the Dow and S&P 500 could suffer their first calendar year decline since 2008 when stocks fell more than 30% during the worst financial crisis since the Great Depression.
Heading into Tuesday's trading session, the Dow was down 1.7% for the year and the S&P 500 was nursing a tiny loss of 0.1%.
For the Dow to flip back into positive territory Wednesday, it will have to climb 102.09 points — 0.6% — or more. The year has only one additional trading session left, Thursday, before the New Year.
U.S. stocks have traded sideways in 2016, despite hitting record highs back in May and then bouncing back from its first 10% price drop, or correction, back in August. Stocks have been weighed down this year by uncertainty regarding Federal Reserve interest rate policy, sales and earnings shortfalls for U.S.companies caused by plunging oil prices and the fallout of the strong U.S. dollar, as well as an economic slowdown in China and an array of geopolitical risks.
"The Santa Claus rally started off with a small decline, but the remaining three days of trading this week and the first two of 2016 should tell the tale," Bill Stone, chief investment strategist at PNC Asset Management told clients in a note.
Stocks are getting a lift Tuesday from a rebound in U.S.-produced crude prices, after another sell-off Monday. U.S.-based crude is up 75 cents, or 2%, to $37.58 per barrel in early trading Tuesday.
Global stock markets were also trading higher Tuesday. In Europe, the broad Stoxx Europe 600 was up 1.2%, with exchanges in Germany and France up more than 1.5%. In Asia, the Nikkei 225 in Japan closed up 0.6%, while Hong Kong's Hang Seng index rose 0.4% and the Shanghai composite index in mainland China was 0.9% higher.
