Wall Street surges in bargain-hunting rally, oil slides

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NEW YORK — U.S. stocks rose sharply on Thursday, fueled by a rebound in mega-cap growth stocks, while crude oil prices and the dollar slid as a spike in COVID cases in China stoked fears of an economic slowdown.

All three major U.S. stock indexes rose in a broad-based rally, with the tech-heavy Nasdaq leading the pack. Those gains were extended after a spike in U.S. jobless claims suggested the Federal Reserve’s hawkish monetary policy was having the desired effect.

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« We’re seeing a slight uptick in labor numbers this morning, all of which suggests an easing of Fed policy, » said Greg Bassuk, managing director of AXS Investments in New York. « We haven’t had a Santa Claus gathering, so we’re also seeing a bit of a drop in purchases. »

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Rising COVID-19 cases in China, following Beijing’s easing of its pandemic-fighting restrictions, have soured risk appetite elsewhere, putting pressure on the dollar and weighing on prices. crude.

Concerns over a looming global recession preoccupied investors on the penultimate trading day of 2022, a year in which central banks’ decades-long battle with searing inflation and Russia’s war on Ukraine have helped push the three major equity indices to their largest annual percentage losses since 2008, the low point of the global financial crisis.

« In 2023, we see a new normal of heightened volatility, a high inflation environment and a likely recession in the United States and globally, » Bassuk said, which « excites all investors as we enter the new year. «

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An uptick in U.S. jobless claims and a sharp drop in eurozone business loans proved that the hawkish monetary policies of the Fed and the European Central Bank are successful in reducing demand in order to calm inflation.

The Dow Jones Industrial Average rose 309.1 points, or 0.94%, to 33,184.81, the S&P 500 gained 61.47 points, or 1.62%, to 3,844.69 and the Nasdaq Composite added 244.75 points, or 2.4%, to 10,458.04.

European stocks reversed earlier losses to follow their US counterparts higher.

The pan-European STOXX 600 index rose 0.57% and the MSCI gauge of stocks across the world gained 1.14%.

Emerging market stocks lost 0.24%. MSCI’s broadest index of Asia-Pacific stocks outside Japan closed down 0.52%, while Japan’s Nikkei lost 0.94%.

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Benchmark Treasury yields softened after three straight days of gains in the wake of U.S. jobless claims data.

Ten-year notes rose 9/32 to 3.8523% from 3.886% on Wednesday night.

The 30-year bond last rose 23/32 to 3.9363%, down from 3.977% late Wednesday.

The dollar fell slightly against a basket of global currencies as hopes of reopening China were dampened by a wave of new COVID cases there.

The dollar index fell 0.4%, with the euro up 0.48% at $1.0659.

The Japanese yen strengthened 1.05% against the US currency to 133.08 to the dollar, while the pound last traded at $1.2046, up 0.27 % over the day.

Crude oil prices fell as the surge in COVID cases in China suggested a slowdown in global demand.

U.S. crude fell 1.76% to $77.57 a barrel and Brent was last at $82.04, down 1.47% on the day.

Gold surged, boosted by dollar weakness.

Spot gold added 0.5% to $1,813.11 an ounce.

(Reporting by Stephen Culp, additional reporting by Elizabeth Howcroft in London; Editing by Emelia Sithole-Matarise)