US stocks rebound back to end with good gains

Materials, industrials, financials, and health care groups led the broad market advance

US stocks ended higher at Comex on Thursday, 27 December 2018. Thursday's stock market featured another tale of two sessions. The bulk of the trading day was marred by an inclination to sell into strength, which fed into worries that this market had more downside to come. The last part of the trading day, however, featured a huge rally from session lows that eviscerated the downbeat sentiment seen in the first part of the day.

The Dow Jones Industrial Average rose 260.37 points, or 1.1%, to end at 23,138.82, after dropping as much as 611 points at its session low. The S&P 500 also erased a sharp decline to rise 21.13 points, or 0.9%, finishing at 2,488.83. The Nasdaq Composite erased a loss of more than 3% to close at 6,579.49, a gain of 25.14 points, or 0.4%.

The materials, industrials, financials, and health care groups led the broad market advance.

Meanwhile, a leading U.S. dollar index that measures the buck against a half-dozen rivals, eased back by 0.6% to 96.46.

Reviewing Thursday's economic data, it included the weekly Initial and Continuing Claims report, the Conference Board's Consumer Confidence Index for December, and the FHFA Housing Price Index for October. Initial claims for the week ending December 22 decreased by 1,000 to 216,000 while continuing claims for the week ending December 15 decreased by 4,000 to 1.701 million. The key takeaway from the report is that initial claims continue to print at low levels that don't suggest any meaningful softening has occurred in the labor market despite the concerns about a slower growth outlook.

The Conference Board's Consumer Confidence Index decreased to 128.1 in December from a revised 136.4 (from 135.7) in November. The key takeaway from the report is that consecutive declines in the Expectations Index point to a growing belief that the pace of economic growth will decelerate in the first half of 2019.

Separately, the FHFA Housing Price Index increased 0.3%, up from an unrevised September increase of 0.2%.

Bullion prices ended higher at Comex on Thursday, 27 December 2018. Gold futures settled solidly higher on Thursday, inching to a fresh six-month high as the dollar eased and U.S. stocks retreated following a surge the day after Christmas.

Gold for February delivery on Comex rose $8.10, or 0.6%, to $1,281.10 an ounce. The contract has closed higher for three consecutive sessions, marking the highest finishes for a most-active contract since June 2018. March silver closed up 18.7 cents, or 1.2%, at $15.310 an ounce.

Bullion's moves come as stocks fell sharply on Thursday following a major bounce a day earlier from the heaviest Christmas Eve losses on record. European stock markets also closed sharply lower.

Crude-oil prices settled sharply lower on Thursday, 27 December 2018, fresh off the biggest one-day rally for futures in more than two years.

West Texas Intermediate crude for February delivery on the New York Mercantile Exchange fell $1.61, or 3.5%, to $44.61 a barrel, while the global benchmark, February Brent crude declined $2.31, or 4.2%, to settle at $52.16 a barrel on the ICE Europe platform. Both crude grades have fallen four of the past five sessions and seven of the past nine.

Overall, the crude market has been heading lower because many investors have been fretting that efforts to remove a recent oil glut haven't sufficient, amid economic sanctions imposed by the U.S. against by the U.S. against Iran, one of the world's largest oil producers and a member of the Organization of the Petroleum Exporting Countries. Saudi Arabia and other major oil producers had raised production as global supplies tightened ahead of Tehran sanctions, but as they came into effect in early November, the U.S. granted waivers to eight nations, including China, allowing them to temporarily continue to import Iranian crude.

U.S. Treasuries closed on a higher note, pushing yields lower, before stocks mounted their late-inning rally. The 2-yr yield declined seven basis points to 2.53%, and the 10-yr yield declined five basis points to 2.74%.

Looking ahead, investors will receive Pending Home Sales for November on Friday.

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