The Dow Jones Industrial Average and the S&P 500 turned positive for the first time in 2016. The positive turn marks a remarkable comeback from what analysts called Wall Street’s worst start ever to a year.
The Dow was up 102 points just after noon on Thursday to 17,427, pushing past the 2015 close of 17425.03. The rally came after gains Wednesday when the Federal Reserve left interest rates unchanged and scaled back plans for further interest rate hikes in 2016.
The S&P 500 turned positive a couple of hours later and was up 0.9 percent to 2045. USA Today reports that the turnaround in stocks has been helped along by a rebound in oil prices, as well as the easing of recession fears. Oil prices rose on Thursday with U.S. benchmark crude topping $40 a barrel for the first time since December 4. While oil prices helped raise stocks on Thursday, GE and Boeing led gains on the Dow.
The turn to positive on Thursday is a huge mark for stocks in the United States. CNN Money reports that just a few weeks ago the markets were in full panic mode. Peter Kenny, an independent market strategist, recalled, “That market the zenith of panic. The market traded to extremely oversold conditions.” He added, “Since the lows we’ve seen the market rally in stealth mode. Those who panicked got punished.”
The positive gains the past few weeks certainly waylaid recession fears. Just five weeks ago, Wall Street appeared to be headed for its first bear market (a drop of 20 percent or more) since the financial crisis. China’s slowing growth and a free fall in oil prices sent stocks tumbling. Investors also panicked about the health of European banks. In early February, pundits started making comparisons between the market of 2016 and the 2008 financial crisis.
Art Hogan, chief market strategist at Wunderlich Securities, added that the country’s recession fears are “in the rear view mirror.” He added that “interest rates are low, inflation isn’t a problem, the labor market is in better shape and moderate GDP growth is likely.”
While the Dow Jones and S&P 500 are in the green, the NASDAQ still remains down 5 percent.