This week started off with doom and gloom.
At Monday’s close, the Dow Jones Industrial Average was down around 9% from its all-time closing high in October, while the S&P 500 had fallen 9.9% from its peak, just shy of the 10.2% February-April correction. That would have been the second official 10% correction within nine months, a rare occurrence.
But instead, stocks rallied big for three straight days. The Dow tacked on almost 1,000 points from Tuesday through Thursday’s close, and the S&P gained 100. The Nasdaq Composite index, which already was in an official correction (off 13.1% from its all-time high), advanced more than 5%.
The rally’s causes ranged from an oversold market through President Trump’s positive comments on a potential trade deal with China’s President Xie Jinping (though these were vague enough to be chalked up to pre-election posturing).
On Friday, there was more good news as the economy added 250,000 jobs in October, while the official unemployment rate remained at a decades-low 3.7%.
Yet by mid-afternoon, stocks were selling off again on Apple’s disappointing sales and earnings forecast and as investors realized a strong job market with 3.1% annual wage growth was likely to produce more rate hikes from the Federal Reserve.
So, is the three-day party over?