Dow Jones up nearly 300 points after stumble snaps 9-day winning streak

U.S. stocks opened higher Thursday, bouncing back strong after the biggest one-day drop for the S&P 500 since September.

What’s happening

The Dow Jones Industrial Average
DJIA
rose 244 points, or 0.7%, to 37,326.
The S&P 500
SPX
was up 40 points, or 0.9%, at 4,738.
The Nasdaq Composite
COMP
gained 176 points, or 1.2%, to trade at 14,954.

On Wednesday, the Dow fell 476 points, or 1.3; the S&P 500 declined 1.5%; and the Nasdaq Composite dropped 1.5%. It was the largest one-day decline in the S&P 500 since Sept. 26, while the Dow and Nasdaq snapped nine-day winning streaks.

What’s driving markets

There wasn’t any clear fundamental trigger for Wednesday’s selloff, setting the stage for a better day on Thursday, but the market has been rallying hard and fast, with the S&P 500 up 22% this year.

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“The turnaround happened around 90 minutes before the U.S. close, and although there wasn’t an obvious catalyst that was responsible, we had just seen the fastest advance for the S&P 500 in over 3 years, so maintaining that momentum was always likely to prove difficult,” Henry Allen, a Deutsche Bank strategist, said in a note to clients.

“As long as it has nothing to do with traders changing their mind on [Federal Reserve] rate cuts then I see any dip as a buying opportunity,” added Matthew Tuttle, chief executive and chief investment officer at Tuttle Capital Management.

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Ahead of the opening bell, stock-index futures extended gains after data showed first-time jobless claims rose by 2,000 to 205,000 in the week ending Dec. 16. Economists had forecast new claims in the week ending Dec. 16 to total 215,000.

U.S. third-quarter gross domestic product was revised down to show annualized growth of 4.9% against an initial estimate of 5.2%, while the Philadelphia Fed’s activity index fell further into negative territory.

Investors later Thursday morning will see the latest reading of the leading economic index, a series that throughout the year has been forecasting a recession that hasn’t come. Friday brings the release of the November personal consumption expenditure index, which includes the Fed’s favored inflation gauge.