U.S. Stocks Stage Massive Comeback Following Rocky Session; Crypto Rally Continues to Fade
U.S. stocks staged a massive rally in the final moments of trading Thursday, as investors shrugged off anxiety tied to politics and economic growth. Cryptocurrencies relinquished a large chunk of their recent surge as altcoins turned defensive.
The Dow Jones Industrial Average was down more than 500 points during the session before rallying into the close. The Dow climbed 260.37 points, or 1.1%, to close at 23,138.82. The blue-chip index surged nearly 1,100 points on Wednesday in one of its biggest single-day rallies since the financial crisis.
The broad S&P 500 Index reversed a loss of more than 2% to finish 0.9% higher at 2,488.83. Ten of 11 primary sectors closed with gains, led by materials stocks.
Meanwhile, the Nasdaq Composite Index rose 0.4% to finish at 6,579.49.
The CBOE Volatility Index, also known as the VIX, turned positive after declining sharply on Wednesday. The so-called “fear index” briefly traded near 34.00 on a scale of 1-100 where 20 represents the historic average. It later settled at 29.96, where it was little changed.
Read about market volatility: Dow Adds 1,000 Points in Relief Rally; Oil Levitates Following Extreme Selloff.
Global Markets Mixed
Global trading patterns were mixed on Thursday, with Japanese stocks following in Wall Street’s lead. Tokyo’s benchmark Nikkei 225 index surged 750.56 points, or 3.9%, to close at 20,077.62. The Nikkei crossed into bear-market territory on Tuesday following a 5% drop.
The Topix index, which also trades in Tokyo, gained 4.9% to finish at 1,501.63.
Australia’s S&P/ASX 200 Index rose 1.9% to finish at 5,597.20.
Chinese markets were down across the board, with the mainland CSI 300 Index losing 0.4% to finish at 2,990.51. Hong Kong’s Hang Seng Index fell 0.7% to 25,478.88.
European stocks fell to two-year lows, with the Euro Stoxx 50 Index of blue-chip companies officially falling to the bears. The index settled down 1.2% to 2,937.36. In individual markets, the U.K.’s FTSE 100 declined 1.5% to close at 6,584.68. Germany’s DAX Index plunged 2.4% to 10,381.51.
Cryptos Under Pressure
Bitcoin and its altcoin peers resumed their slide on Thursday, possibly signaling the end of the recent downtrend. The combined crypto market cap fell $9 billion to $121.5 billion. Markets peaked north of $147 billion on Monday.
Bitcoin’s price fell 4.2% to $3,671, but its share of the overall market grew to 52.7%. Bitcoin’s dominance rate fell to just over half on Christmas Eve, its lowest in five months.
Declines in bitcoin have been accompanied by a steady rise in Tether, a dollar-backed stablecoin that is used to trade virtual currencies. USDT gained 0.6% on Thursday to $1.03.
Bitcoin cash was the biggest decliner among the majors, losing 12.6% to $150.84. Ethereum fell 9.6% to $117.71. XRP, the second largest cryptocurrency by market cap, declined 6.6% to $0.3478.
Disclaimer: The author owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
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