Wall Street got its mojo back in January after finishing 2018 with its worst December since 1931.
Stocks finished higher Thursday, closing out the Standard & Poor’s 500 index’s best month since October 2015.
A series of strong corporate earnings reports helped power the monthlong rally, which followed a dismal December that nearly brought the benchmark index into a bear market — a decline of 20% from a recent peak.
Facebook helped drive the market higher Thursday after reporting solid user metrics. Charter Communications soared after its revenue beat forecasts. General Electric also climbed. Amazon reported earnings after the close of regular trading that topped analyst expectations.
Home builders surged after new data showing that sales of new U.S. homes soared in November — although the new-home sales did fall in the West.
Strong results and outlooks from big U.S. companies seem to be calming some of investors’ fears that a recession might be looming.
“Overall, we’re still encouraged that this earning season is comforting to people,” said Ryan Detrick, senior market strategist at LPL Financial.
The S&P 500 index rose 23.05 points, or 0.9%, to 2,704.10 on Thursday, bringing its January climb to 7.9%. In December, it tumbled 9.2%.
The Dow Jones industrial average edged down 15.19 points, or 0.1%, to 24,999.67. The Nasdaq composite climbed 98.66 points, or 1.4%, to 7,281.74. The Russell 2000 index of smaller companies ticked up 12.48 points, or 0.8%, to 1,499.42.
Communications, healthcare and consumer goods and services stocks powered Thursday’s market gain as investors remained focused on corporate earnings, which have been mixed.
Facebook beat Wall Street’s profit and revenue forecasts, despite an increase in spending on privacy and security. Its user base grew to 2.32 billion, up 9% from a year earlier and higher than analysts’ forecasts. The stock gained 10.8% to $166.69.
General Electric shares climbed 11.6% to $10.16 after the industrial conglomerate reported fourth-quarter results that were mixed but showed revenue and profit rising across most of its segments. It has been cutting costs and spinning off units for years in a bid to boost its bottom line.
Microsoft fell 1.8% to $104.43 after the technology company swung to a profit in its latest quarter, driven by revenue growth at its cloud-computing platform. The results beat forecasts, but the company’s key personal computing segment fell short of estimates.
Home builders climbed on new data showing sales of newly built homes soared in November. The Commerce Department said new-home sales jumped 16.9% in November from the previous month. Despite the healthy gain, sales remained 7.7% below the year-earlier pace. The report was delayed by the 35-day government shutdown.
Meritage Homes led the pack, jumping 10.1% to $45.08.
Concerns over the U.S.-China trade war, uncertainty over the path of interest rates and signs of a weakening global economy helped knock the market into a steep slump in December. Although concerns over trade and a slowing economy remain, corporate earnings have put investors in a buying mood. And this week, the Federal Reserve sent a strong signal that it is in no hurry to raise interest rates in coming months, another confidence boost for the market.
Trade talks between the United States and China entered a second day Thursday. President Trump voiced optimism before meeting with representatives from China, but noted there would be “no final deal” until he sits down with Chinese President Xi Jinping.
Among the biggest gainers in January were Xerox and Celgene, which climbed 42.8% and 38%, respectively. General Electric gained 34.2%.
Boeing notched the biggest January gain in the 30-company Dow, leaping 19.6%.
U.S. crude oil fell 0.8% on Thursday to $53.79 a barrel in New York. Brent crude, used to price international oils, rose 0.4% to $61.89 a barrel in London. Wholesale gasoline fell 1.4% to $1.36 a gallon. Heating oil fell 1% to $1.88 a gallon. Natural gas fell 1.4% to $2.81 per 1,000 cubic feet.
Bond prices rose. The yield on the 10-year Treasury fell to 2.64% from 2.69%.
The dollar fell to 108.66 yen from 108.92 yen. The euro weakened to $1.1479 from $1.1492.
Gold rose 0.7% to $1,319.70 an ounce. Silver rose 0.9% to $16.07 an ounce. Copper rose 0.6% to $2.78 a pound.