The Dow Jones industrial average enjoyed its best one-day gain of 2014 Wednesday, and it turns out that was nothing.
A day after gaining 288 points, the index surged 421 points, or 2.4%, to 17,778, in its best gain since late 2011. The move, which doubled in a late-day surge, easily outpaced Wednesday's advance, which followed the statement and remarks from Federal Reserve Chair Janet Yellen, who signaled the central bank doesn't expect to increase interest rates until at least April.
The Fed's stance of remaining "patient" with respect to rate hikes has given fuel to the the bulls, helping build a two-day rally that erased most of the preceding stretch that featured five triple-digit declines over seven sessions. Also helping matters was the lowest tally of new jobless claims in six weeks, with new filings for unemployment benefits down to 289,000, fewer than expected.
Leading the Dow's advance were
Thursday's gains were widespread. The Nasdaq was up 2.2%, the Russell 2000 1.4% and the S&P 500 2.4% to 2,036. All S&P sectors were in positive territory, with energy briefly out in front before ceding its leadership position.
Energy's initial climb came amid a brief respite from the punishing plunge of oil prices, but within the first 90 minutes of trading gains began to unravel. West Texas Intermediate crude oil, higher early in the session, dropped back to $54.74 a barrel, while Brent crude dropped below $60.
The short-lived relief also faded in stocks like
Osterweis Capital Management wrote in a letter to clients Thursday that it expects the pace of oil development to slow globally in the next 6-12 months until and unless prices climb back above $80. "Consequently, supply should start to contract by next spring/summer and oil prices will likely rebound by next fall," the firm said. Its energy exposure stems in part from
FundStrat's Thomas Lee estimates the beneficial impact from lower oil prices could feed through as much as $88 billion in savings to U.S. consumers as gasoline prices plummet 22% from a year ago. He also notes, in a bullish forecast for 2015 that includes another 19% climb for the S&P 500, that the last five times oil fell at least 40% since 1980 the consumer discretionary sector outperformed for the next 12 months.
That could bode well for stocks like
Elsewhere on the earnings front,
The widespread gains weren't universal though, leaving companies like GoPro (down 3.9%),