Stock Market Records Huge Gains After Christmas Break

December 27, 2018
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Christmas Eve left investors worried about the state of the stock market. A month of high volatility led to the worst December 24 performance in history. The S&P 500 was close to hitting bear market territory.

The situation completely reversed on Wednesday with a rapid turnaround that led to the best post-Christmas trading session on record. The Dow Jones Industrial Average had its best single day gain ever, climbing more than 1,000 points before the closing bell.

How Stock Market Fared on December 26

Major indexes and benchmarks recorded significant gains on Wednesday. While it would be premature to say that full confidence has returned to the market, it at least shows that there’s still a lot of life in equities.

  • The Dow Jones Industrial Average ended the day up 1,086 points, the equivalent of 5% growth.
  • The S&P 500 benchmark, which tracks the largest cap stocks on the stock market, increased by 116 points, the equivalent of 5% intraday growth.
  • The NASDAQ Composite fared even better, increasing 361 points for a gain of 5.8%. The NASDAQ is heavily tech weighted and this will be a huge relief for investors who have watched tech stocks fall in recent months.

Single day gains like this have not been seen since March 2009. In terms of post-Christmas trading, figures were the best on record.

Strong Retail and Energy Sector Performance

Retail stocks were ahead of the curve on Wednesday. Consumers in the U.S. generated over $850 billion in revenue for retailers in the lead up to Christmas. This led to rapid growth for several key stocks.

  • Amazon (NASDAQ: AMZN) grew 9.45% after announcing that it had its best holiday season yet.
  • Walmart (NYSE: WMT) grew 5.35% at the close of trading.
  • Target Corp. (NYSE: TGT) was another strong performer, growing 5.78% by the closing bell.

The retail sector wasn’t alone in benefitting from a sudden dose of investor confidence. Energy stocks also rose, thanks to sharp appreciation in oil prices. The entire energy sector recorded gains equating to over 6%. BP (NYSE: BP), one of the largest publicly traded energy companies, was up 3.85% when the stock market closed.

Wednesday’s Performance Will Give Hope to the Bulls

Investors who still believe in a bull market will take confidence from the record-breaking performance on Wednesday. While single day growth is no guarantee of a trend, it at least suggests that investors are willing to put confidence in stocks if the market conditions are right.

Three days of trading remain in 2018, before both the NASDAQ and NYSE close for the New Year’s Holiday on January 1.

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