11:10 a.m. EDT October 24, 2015 After a big rally and busting through a key price ceiling Thursday, the Standard & Poor’s 500 stock index is now within striking distance of climbing back into the black for the year.
Back on Aug. 25, when the large-company stock index was down 12.4% from its May high, off more than 9% for the year, and suffering through its first 10% drop, or correction, in four years, few bulls expected the market to mount this type of comeback.
But the market has defied skeptics, many who argued that a major bear market was brewing.
At its high point Thursday, the S&P 500 climbed within four points, or less than two-tenths of a percentage point, of its 2014 close of 2,058.90. After rallying 34 points, or 1.7%, to 2,052.51, the benchmark index not only busted out above the 2,040 to 2,045 level that had been acting as a price ceiling for weeks, it also put Wall Street on notice that climbing back into the black for 2015 is more than just wishful thinking.
And after a hat trick of earnings beats in the tech sector after the closing bell Thursday (Amazon.com, Microsoft and Alphabet all posted strong earnings results that sent their shares up close to 10% each), S&P 500 futures are pointing up 17 points, or 0.8% in pre-market trading. A surprise interest rate cut this morning by China's central bank to try to boost lagging growth in the world's second-biggest economy gave stocks an added boost. If those gains hold at the open of trading, the S&P 500 will show a positive gain for 2015.
Thursday’s rally was driven by a surprisingly strong profit report from burger giant McDonald’s and hints from the European Central Bank that more stimulus could be on the way to boost flagging eurozone growth. Those drivers built on prior ones, namely the belief that the Federal Reserve will hold off on interest rate hikes until 2016 and the fact China’s economy did not implode.
Wall Street will be watching Friday to see if the market can close in positive territory for the year.
If it does, it will bolster the case for a year-end rally.
