Stocks close higher, building on Wednesday’s epic gains

Wall Street staged a swift, last-minute turnaround Thursday that rescued stocks from a steep dive and put the market on track to end a topsy-turvy, volatile week with a gain.

The comeback reversed a 611-point drop in the Dow Jones industrial average and pushed the index higher still. The Standard & Poor’s 500 index and the Nasdaq composite eked out modest gains after having been down 2.8% and 3.3%, respectively.

Thursday’s sharp swing followed stocks’ best day in 10 years. Even so, the market remains headed for what could be its steepest annual loss since the financial crisis of 2008.

The market’s sharp downturn began in October and has intensified this month, erasing all of the major U.S. indexes’ 2018 gains and nudging the S&P 500 closer to its worst year in a decade. Even with the two-day winning streak, the Dow, S&P 500 and Nasdaq are all down more than 9% for the month, and stocks are on track for their worst December since 1931.

“There are reasons we should be volatile, including a lot of unknowns as we head into 2019, starting with tariffs,” said JJ Kinahan, chief markets strategist for TD Ameritrade, noting that below-average trading volume this time of year is also contributing to the market’s volatility this week.

Before the two-day rally, the S&P 500 fell in 11 of December’s 16 trading sessions, and in five of those declines it slid 2% or more. Investors had grown worried that the U.S.-China trade war and higher interest rates would slow the economy and hurt corporate profits.

“The last two days are really demonstrable of what the market is struggling with,” said Tom Martin, senior portfolio manager of Globalt Investments. “It’s looking for a bottom. It’s looking for a reason to gain a little more confidence. And it’s also looking for opportunities to reposition and lessen risk.”

Healthcare, technology, bank and industrial stocks accounted for much of Thursday’s broad gains.

The S&P 500 index ended the day up 21.13 points, or 0.9%, at 2,488.83. The Dow climbed 260.37 points, or 1.1%, to 23,138.82. Both indexes rose about 5% on Wednesday, when the Dow had its biggest-ever single-day point gain.

The tech-heavy Nasdaq rose 25.14 points, or 0.4%, to 6,579.49. The Russell 2000 index of smaller-company stocks ticked up 2.01 points, or 0.2%, 1,331.82.

Bond prices rose. The yield on the 10-year Treasury slipped to 2.78% from 2.79% late Wednesday, although the yield dropped as low as 2.73% when stocks were near their lowest levels as investors sought safer investments.

Benchmark U.S. crude dropped 3.5% to settle at $44.61 a barrel in New York. Brent crude, used to price international oils, sank 4.2% to $52.16 a barrel in London.

The dollar weakened to 110.74 yen from 111.36 yen. The euro strengthened to $1.1449 from $1.1351.

Gold rose 0.6% to $1,281.10 an ounce. Silver rose 1.2% to $15.31 an ounce. Copper fell 1.2% to $2.67 a pound.

Overseas, major indexes in Europe closed lower. Markets in Asia mostly rose.