U.S. Stocks Show Strong Move To The Upside On Christmas Eve

In an abbreviated Christmas Eve session, stocks moved sharply higher over the course of the trading day on Tuesday. The major averages all showed strong moves to the upside, extending the upward move seen over the two previous sessions.

The major averages saw further upside going into the close, ending the session at their best levels of the day. The Dow advanced 390.08 points or 0.9 percent to 43,297.03, the Nasdaq surged 266.24 points or 1.4 percent to 20,031.13 and the S&P 500 jumped 65.97 points or 1.1 percent to 6,040.04.

The strength on Wall Street came as traders continued to pick up stocks at relatively reduced levels following last week’s sell-off, which saw the Dow and the S&P 500 tumble to their lowest levels in over a month.

Stocks may also have benefitted from ongoing optimism about the outlook for the markets even after indications the Federal Reserve plans to cut interest rates less than previously estimated next year.

The extent of the upward move may have been exaggerated by below average volume, as many traders remained away from their desks ahead of the Christmas Day holiday on Wednesday. The markets also closed earlier than usual on the day, which likely kept some traders on the sidelines.

A lack of major U.S. economic data may also have contributed to light trading, as the release of reports on durable goods orders and new home sales was pushed forward to Monday after President Joe Biden signed an executive order closing the federal government for Christmas Eve.

Brokerage stocks turned in some of the market’s best performances on the day, driving the NYSE Arca Broker/Dealer Index up by 1.7 percent.

Significant strength was also visible among retail stocks, as reflected by the 1.5 percent gain posted by the Dow Jones U.S. Retail Index.

Networking, computer hardware and banking stocks also saw notable strength moving higher along with most of the other major sectors.

In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance during trading on Tuesday. While Japan’s Nikkei 225 Index dipped by 0.3 percent, Hong Kong’s Hang Seng Index jumped by 1.1 percent and China’s Shanghai Composite Index surged by 1.3 percent.

Meanwhile, European stocks saw modest strength in light pre-holiday trading. The U.K.’s FTSE 100 Index climbed by 0.4 percent and the French CAC 40 Index inched up by 0.1 percent, while the German markets were closed on the day.

In the bond market, treasuries have bounced back near the unchanged line after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, is down by less than a basis point at 4.591 percent.