Biggest Market Rally Since 2009 Follows Days Of Painful Losses

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The stagnation in the progress of resolving the trade war between the US and China supported by the Federal Reserve's increasing interest rate have continued to take a toll on the global economy and major stock markets in leading regions such as Japan, South Korea, and China.

While yesterday's rally may have taken stocks into overbought territory, from a short-term standpoint anyway, it's also possible that certain underlying worries that haven't gone away are capping the market's attempt at a Santa Claus rally.

Stocks closed higher Thursday after a furious, late-afternoon rally erased steep losses.

The partial US government shutdown that started Saturday is unlikely to hurt the economy much, although it may deprive the financial markets of data about global trade and gross domestic product. -China trade war have led investors to fear the short-term trend of the market, with some anticipating a full-blown recession to hit the USA economy. The Nasdaq Composite Index advanced 361.44 points, or 5.84 percent, to 6,554.36.

According to CNBC, "retailers were among the best performers on Wednesday..." Before the recent bounce, the index fell 20 percent from its recent peak, slipping into a bear market.

The Dow lost 1,883 points over the prior four trading sessions and is still down 2,660 for December. The Nasdaq Composite also recorded its best performance since March 2009, climbing about 5.8 percent.

Wednesday's rebound, which also helped all three indexes notch their largest daily percentage gains in almost a decade, was fuelled by a strong United States holiday sales report, a jump in oil prices and investors reversing bets against a wide range of stocks after four days of declines.

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"We expect the effect on real GDP would amount to -0.07 percentage points per week of shutdown", the report said.

Benchmark U.S. crude dropped 2.4 percent to $45.12 a barrel in NY.

The market apparently got a lift Wednesday when Kevin Hassett, chairman of the White House Council of Economic Advisers, said in an interview with The Wall Street Journal that the Fed chairman is in no danger of being fired. Nordstrom picked up 5.8 percent to $46.75.

Homebuilders slumped following a report indicating that fewer Americans signed contracts to buy homes last month. Noble Energy slid 4.1 percent to $18.31.

The heavy-weight FAANG group - Facebook Inc (FB.O), Amazon, Apple Inc (AAPL.O), Netflix Inc (NFLX.O) and Alphabet Inc (GOOGL.O), rose between 1 percent and 4 percent. Benchmark Brent crude increased more than 8.5 percent to more than $54 per barrel.

Risk Indicators: The VIX, shown as a bar chart, has come down from recent highs, and Treasury yields, as represented by a purple line showing the 10-year Treasury Index, have risen. Copper gained 1.5 percent to $2.70 a pound. Britain's FTSE 100 fell 1.5 percent.

Retailers helped lead the charge Wednesday, as shares of Wayfair, Kohl's and Dollar General all rose at more than 7 percent, CNBC reported. Shares fell in Taiwan, Singapore and Indonesia but rose in Thailand. The German DAX slid 2.4 percent, while the Nikkei 225 index rebounded 3.9 percent. The Hang Seng index was 0.7 percent higher at 25,819.22.