U.S. stocks closed higher on Thursday, with major indexes posting their first three-day rally in several weeks as investors dialed back fears that a trade spat between the U.S. and China will turn into a full-blown trade war.
The move suggested increased stability in the equity market, particularly after Wall Street staged a big turnaround Wednesday, erasing a sharply lower open.
What are main benchmarks doing?
The Dow Jones Industrial Average /zigman2/quotes/210598065/realtime DJIA -0.88% rose 241 points, or 1%, to 24,505. The benchmark for blue chips closed its first three-session winning streak since the three-day period ended Feb. 26, according to FactSet data.
The S&P 500 index /zigman2/quotes/210599714/realtime SPX -1.12% was up 18 points, or 0.7%, to 2,663, led by a 1.8% gain for energy as crude prices gained, and a 1.9% climb in the materials sector, considered one of the most correlated industries to trade issues.
The Nasdaq Composite Index /zigman2/quotes/210598365/realtime COMP -1.07% added 34 points, or 0.5%, to 7,077. Gains in the Nasdaq were limited by weakness in chip makers, which pressured the overall technology sector.
The day’s gains were broad, with 10 of the 11 primary S&P 500 industry groups closing up on the day. Health-care, the only decliner, dipped less than 0.1%.
On Wednesday, the Dow Jones Industrial Average recovered from a 510-point intraday loss, at its session low, to finish up about 230 points, or 1%, to 24,264.30 The S&P 500 and Nasdaq gained 1.2% and 1.5%, respectively, and the dramatic turnaround helped the Nasdaq return to positive territory for the year. The S&P 500 finished safely above its 200-day moving average for a second straight session, a positive sign for long-term momentum trends.
Extreme volatility has been a hallmark of equities lately. So far this year, the S&P 500 has had three times as many sessions with a 1% move than it recorded in all of 2017. Thursday was the first day of April when the benchmark index doesn’t close with a 1% move.
What’s driving markets
Worries about trade hostilities between the two biggest economies in the world continued to ease. Stocks were battered initially on Wednesday after tit-for-tat tariffs on imports were announced by the U.S. and China.
But now there will be shift to a period of negotiation, with the U.S. and China expected to spend six months in talks to resolve their trade differences. In addition, speculation that the U.S. could survive even a protracted trade war is stoking some upbeat sentiment among investors.