Economy

U.S. stocks lose momentum a day after Dow's record gain

U.S. stocks lose momentum a day after Dow's record gain

The president on Christmas Day cast fresh doubt on the record of Powell, whom he has increasingly blamed for the market weakness.

As of Thursday morning, two-thirds of the rally was intact. A senior Treasury official told CNBC on Monday that the goal of Mnuchin's call and statement was to take a "prudent, preemptive measure" after last week's market volatility.

"It was probably a pretty good retail-oriented holiday and that probably has a lot to do with what's happening today", said Kim Forrest, a senior portfolio manager at Fort Pitt Capital Group.

The Dow Jones Industrial Average finished up almost 1,100 points, or about five per cent, at 22,878.45 points, and the broad-based S&P 500 also flew 5 per cent higher. Bank of America, JPMorgan and Goldman Sachs slipped more than 1 percent as the yield on the the 10-year Treasury fell to 2.76 percent from 2.79 percent.

The Dow Jones Industrial Average slumped 600 points in afternoon trading Thursday.

A recession is coming, they said. "Amazon's stock also jumped 7.3 percent after the company said it sold a record number of items this holiday season".

A few things might have shaken the bears' grip. President Donald Trump, after ripping up trade policies aimed at stitching global economies together, has further unsettled markets by signaling he wanted to fire Federal Reserve Chairman Jerome Powell. Trump expressed confidence in Mnuchin yesterday. All three benchmarks advanced by at least 5 per cent. Rallies in retail and energy shares led the gains, as NY recovered the losses suffered in the previous session.

For some investors, it was simply a case of a market getting ahead of itself when everything from hiring to earnings to the economy are still rising.

There were also renewed concerns in Italy, where troubled lender Banca Carige was denied a cash call by its largest shareholder, pushing its shares down 12.5 percent.

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"This is a market selling off as if it believes that we are headed in to a stall".

Everyone on Wall Street knows strong rallies are common in troubled times.

All three major US indexes - Dow, S&P and Nasdaq - finished down 2 percent or more on Christmas Eve.

Every sector was trading higher, with energy (+3pc), resources (+2.4pc) and health care (+1.7pc) leading the gains.

Earlier losses saw the S&P enter a bear market on Monday, ending a 10-year run as a bull market.

The stock market was only open for half a day Monday, and that was more than enough time for the Dow Jones Industrial Average to drop 2.9 percent to 21,792.20. Unemployment is at 3.7 per cent, the lowest since 1969.

The Dow closed at 22,878.45, up 1,086.25 points, or five per cent, on the day. You have the market leaning one way or the other, and it can often do what it's doing today, which is go higher. Monday is year end. It's looking for a reason to gain a little more confidence.

"Markets are becoming more rattled by criticism of the Fed", said Kristina Hooper, Invesco chief global market strategist. "This is just a face ripping short cover rally". Brent crude, used to price worldwide oils, gained 0.6 percent to $51.10 a barrel in London.


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