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Dow Jones soars 1,086 points in largest single-day increase

Dow Jones soars 1,086 points in largest single-day increase

On Wednesday, U.S. markets snapped a four-day losing streak and clocked their best day in more than 10 years.

Many investors have been unnerved by a variety of factors, including the partial US government shutdown, the US-China trade war and Trump's ongoing criticism of Fed Chair Powell.

All three major USA indexes - Dow, S&P and Nasdaq - finished down 2 percent or more on Christmas Eve.

The S&P 500 rallied 5 percent, the Dow Jones Industrial Average added 1,086 points, and the Nasdaq 100 had its best day since 2009. The Nasdaq Composite COMP, +5.84% rose around 361 points, or 5.8%, to finish around 6,554.

For a brief time, stocks rebounded, but were sent tumbling when President Donald Trump reignited concerns about the relationship between the White House and the Federal Reserve after it raised its benchmark interest rate one-quarter point, to 2.5 percent, last week. Some traders have suggested that the market has gotten to the point where a short-term bounce could occur, if only for technical reasons.

Kevin Hassett, chairman of the White House Council of Economic Advisers, said on Wednesday that Fed chairman Jerome Powell's job was not in jeopardy.

The previous record point gain for the Dow was 936.42 on October 13, 2008, when markets were whipsawed nearly daily by developments in the financial crisis, which was then in full swing. Markets in Europe, Hong Kong and Australia were closed. South Korea's Kospi gave up 1.3 percent, while Japan's Nikkei 225 index, which plunged 5 percent on Tuesday, picked up 0.9 percent.

The Dow was whirling between slightly negative to 200 points up in the first hours of Wednesday's session before its early afternoon lift on the tails of surging blue chips Apple, Home Depot, Microsoft, Visa and Nike.

Panic gripped NY on Christmas Eve and spread to Tokyo on Christmas Day, putting paid to any chance of the traditional "Father Christmas rally" that has cheered investors each December for the past six years. But despite evidence that the USA economy remains robust, this year could still mark the first bear market in close to a decade. Kohl's gained 8.3 percent to $64.75. The markets haven't really been trading on fundamentals very much.

"Yesterday was a blowout day for US equity markets which triggered optimism that this could be a key reversal day but the upward momentum has not really followed through into Asia and Europe", said Lee Hardman, an analyst at MUFG in London. "Oil prices have just moved quite markedly".

Further afield, worries that the Chinese economy is slowing more sharply than expected and that eurozone growth has been sluggish also weighed on trading throughout December. Brent crude, used to price worldwide oils, was down 2.6 percent to $53.34 a barrel in London.

Benchmark U.S. crude dropped 2.6 percent to $45.04 a barrel in NY.

CURRENCIES: The dollar strengthened to 110.57 yen from 110.41 yen on Monday. Futures for the broad S&P futures were down 1 per cent at 2,447.25. The euro rose to $1.1397 from $1.1353.

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