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S&P 500 erases monthly loss on biggest 3-day rally since 2011

U.S. stocks rose Friday, sending the Standard & Poor’s 500 Index near its all-time high and erasing losses for December, after the Federal Reserve spurred the biggest three-day jump since 2011.

The S&P 500 added 0.5 percent to 2,070.65. The benchmark gauge surged 3.4 percent for the week, the most since October. It is now up 0.2 percent for December and trading 5 points below a closing high reached Dec. 5. The Dow Jones industrial average gained 26.65 points, or 0.2 percent, to 17,804.80. Energy shares advanced 3.1 percent.

“The Fed set the tone and that what’s fueling the market right now,” Stephen Carl, principal and head equity trader at New York-based Williams Capital Group LP, said in a phone interview.

U.S. stocks have tripled during the 5½-year bull market, driven by the Fed’s three rounds of bond buying and borrowing costs near zero to stimulate the economy. A slide in oil prices and signs of a global economic slowdown rippled through financial markets earlier this month, wiping more than $1 trillion from U.S. equity values in less than two weeks. The S&P 500 lost 5 percent in seven trading days through Dec. 16.

The S&P 500 rallied 4.5 percent in the previous two days as energy shares advanced and Fed Chair Janet Yellen said the central bank will probably hold rates near zerot through the first quarter. The gains Friday brought the three-day surge to 5 percent, the biggest increase since November 2011.

The benchmark index is points away from completing the fifth recovery this year from a decline of 4 percent or more, just 14 days after it started. In comparable drops beginning in January, April, July and September, the S&P 500 needed about a month to erase losses, data compiled by Bloomberg show.

The rebound in equities may help push the S&P 500 to its seventh consecutive December rally, as investor anxiety is fading.

More than 11 billion shares changed hands on U.S. exchanges, the most since Oct. 15. Some futures and options on stocks and indexes expire Friday.

Nine of 10 major industries in the S&P 500 advanced, with energy shares leading the way for the third day this week, jumping 3.1 percent.

Nabors Industries Ltd. climbed 15 percent and Denbury Resources Inc. added 14 percent. Exxon Mobil Corp. and Chevron jumped more than 2.7 percent for the best performances in the Dow.

American Apparel Inc. climbed 7 percent after an 82 percent jump in the past three days.

Red Hat Inc. rallied 11 percent and Cintas Corp. rose 6.4 percent after posting quarterly earnings that beat analysts’ estimates.

CarMax Inc. gained 11 percent after reporting third-quarter earnings of 60 cents, beating the average analyst estimate of 54 cents.

Nike Inc. slipped 2.3 percent after future orders for the world’s largest sporting-goods maker rose less than analysts had predicted.