The U.S. stock market rallied led by equities in healthcare and energy sectors. The S&P 500 gained 1.67%, and the Dow Jones Industrial Average (DJIA) climbed 1.41%.
The stock price of energy companies recovered as crude oil prices traded higher. The WTI crude went up 2.43% to $31.22 per share, and the Brent crude climbed 2.38% to $31.03 per share.
In an interview with Bloomberg, Bruce Bittles, the chief investment strategist at Robert W. Baird, said, “This is the relief rally we’ve been waiting for. Pessimism had grown to such a level that enough cash had been raised on the sidelines to sport at least a short-term rally. Better-than-expected earnings could be something for the bulls to grasp and provide this rebound some sustainability.”
Separately, Federal Reserve Bank of St. Louis President James Bullard stated that the recently oil price decline could affect the return of the inflation rate towards the 2% target.
“With renewed declines in crude oil prices in recent weeks, the associated decline in market-based inflation expectations measures is becoming worrisome,” said Mr. Bullard.
“Headline inflation will return to target once oil prices stabilize, but recent further declines in global oil prices are calling into question when such a stabilization may occur,” he added
Mr. Bullard also said the U.S. economy will likely expand by around 2.5% to 3% this year, and the recent market volatility should not be a reason to change that forecast. He strongly supported raising interest rates given the continued improvement in the labor market.
Meanwhile, Benno Galliker, a trader at Luzerner Kantonalbank AG. Commented that the current message is “play it safe.” He added that investors will have a clearer picture of the market after evaluating all the earnings numbers.
• Dow Jones Industrial Average (DJIA) – 16, 379.05 (+1.41 %)
• S&P 500- 1,921.84 (+1.67%)
• NASDAQ- 4,615.00 (+1.97%)
• Russell 2000- 1,026.99 (+1.66%)
• EURO STOXX 50 Price EUR- 3,024.00 (-1.60%)
• FTSE 100 Index- 5,918.23 (-0.72%)
• Deutsche Borse AG German Stock Index DAX- 9,794.20 (-1.67%)
• Nikkei 225- 17,240.95 (-2.68%)
• Hong Kong Hang Seng Index- 19,817.41 (-0.59%)
• Shanghai Shenzhen CSI 300 Index- 3,221.57 (+2.08%)
Stocks in Focus
Best Buy tumbled more than 9% to $26.43 per share. The electronics retailer reported that its domestic holiday revenue declined by 0.8% to $10.1 billion. The company estimated a1.5% drop in fourth quarter domestic revenue.
Exxon Mobil climbed more than 4% to $79.12 per share, its highest gain since August.
The stock price of Williams Companies surged more than 32% to $18.05 per share, one of the biggest gainers among the companies in the energy sector. The company stock recovered some of its losses. The stock was down 48% over the past six days.