Stocks quickly began to trim their early gains Wednesday, as holiday sales data boosted Amazon.com (AMZN) and retail stocks, and the Dow Jones industrial average struggled to snap a three-day losing streak.
The Nasdaq Composite trimmed a 1.8% gain to 0.6%. FANG stocks veered sharply higher with Amazon.com leading data showed a jump in holiday season sales. Facebook (FB) surged after a positive analysts note.
The Dow Jones industrial average pared its early gain to nothing, fighting to hold in positive territory. The S&P 500 narrowed its opening gain to 0.2%. Visa (V) and Nike (NKE) topped the early gains among Dow Jones stocks. Amazon, Kohl’s (KSS) and Dollar General (DG) jumped into the lead among S&P 500 stocks.
Will Dow Jones Join Widening Global Bear Market?
In Japan, Tokyo’s Nikkei 225 crashed 5% on Tuesday, tumbling below the 20,000 level and into bear market status. On Wednesday, the Nikkei bounced 0.9%, but remained more than 20% from its Oct. 2 high.
Stock markets in China, Germany and Japan are now trading in bear market territory. A benchmark index that drops more than 10% from a recent high is technically considered to be in a correction. Declines of more than 20% are called bear markets.
The Russell 2000 small cap indicator was the first significant U.S. index to slip into a bear market, undercutting the 20% level on Dec. 17. The Nasdaq slipped below the bear market threshold on Thursday. The S&P 500 on Monday settled just at the 20% level, below its September high — technically bestowing bear market status.
The question is whether the Dow Jones industrial average will be the next domino to fall. It ended Monday’s session 19.1% below its October high. Among other global benchmarks, the CAC-40 in Paris ended Monday 18.2% below its peak. London’s FTSE 100 finished Monday 15.1% off its record high from May. Exchanges in London, Frankfurt and Paris remained shut for the holiday on Wednesday.
The Shanghai Composite slipped 0.3% on Wednesday. The Hong Kong stock exchange was closed on holiday.
In India, the Bombay Stock Exchange’s Sensex index gained 0.5% Wednesday. That left it up 4.8% so far for the year. The market had climbed 14.5% to its peak for the year in August.
Dow Jones: Visa Leads, Boeing Climbs
Visa soared 2.8% in early trade after Mastercard SpendingPulse reported the best online and in-store holiday sales gain in six years. Visa shares are down about 18% from an October high.
Amazon jumped 3.3% early, after turning in another record-setting holiday sales season. Amazon stock is tracking toward a fourth straight weekly decline. It undercut its prior lows from April on Monday.
Boeing (BA) edged 0.6% higher in premarket action. News reports on Tuesday said preliminary findings in the investigation of the October’s crash of a Lion Air jet in Indonesia determined a maintenance error was at fault. Boeing shares have slipped 18% since the Oct. 29 crash of the 737 MAX aircraft that killed all 189 people aboard.
Stocks: Tesla Surges On Model 3 Outlook
Tesla hashed out an earl 3.2% gain. An analyst’s note from Wedbush said the company had solved the major problems dogging its Model 3 production, that demand looked strong heading into the New Year, and the model was set to “generate improved profit and cash flow.” The note reiterated an outperform rating and a 440 price target.
Tesla shares fell out of a four-month base-building effort over the past two weeks. The stock cut below its 40-week moving average in weak trade on Monday.
China-based online retail giant JD.com jumped 1.4%. The company announced its board had approved a $1 billion buyback of its American Depositary receipts, to be completed over the next 12 months. JD.com shares have been under pressure following the Aug. 31 arrest of Chief Executive Liu Qiangdong on rape allegations in Minneapolis. Liu, who was cleared of the charges this month, controls nearly 80% of JD.com’s voting shares.
The stock is down more than 60% from a January high.
Oil Prices Surge Off 18-Month Lows
Oil prices advanced along with most commodities early Wednesday. West Texas Intermediate gained nearly 4%, jumping back above $44 a barrel and rebounding from its weakest level since June 2017. Brent crude was up 2.4% and trading near $52.
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