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U.S. Stocks Drop Sharply Amid Continued Volatility

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Wall Street notches best day in 10 years in holiday rebound

Canada's main stock index rose almost 2 percent at open on Thursday, helped by broad-based gains across all major sectors.

U.S. stock markets struggled to build a post-Christmas rally on Wednesday morning, recovering some of the ground they lost after their worst ever performance on Christmas Eve. The Nasdaq composite picked up 5.8 percent to 6,554.36.

But the gains halved as a pan-European equity index fell 1.1 percent after a strong open and export-reliant German shares lost 2 per cent. Data released by Mastercard SpendingPulse showed that retailers had their best holiday season in six years.

"The markets are in panic mode that the U.S. economy is tanking", Stephen Innes, head of Asia-Pacific trading for online broker Oanda, said in an email.

The markets were closed on Tuesday because of the Christmas holiday. On Christmas eve Trump tweeted: "The only problem our economy has is the Fed". The Hang Seng index fell 0.7 percent and Australia's S&P-ASX 200 jumped 1.9 percent.

Wednesday's gains pulled the S&P 500 back somewhat from the brink of a bear market, where it finished after a shortened trading session Monday.

Trump administration officials spent the weekend trying to assure jittery financial markets that U.S. Federal Reserve chair Jerome Powell's job was safe. But despite evidence that the U.S. economy remains robust, this year could still mark the first bear market in close to a decade.

The market's sharp downturn since October intensified this month, erasing all of its 2018 gains and nudging the S&P 500 closer to its worst year since 2008.

Source ABC News
Source ABC News

Among tech stocks, Adobe rose 8.7 percent.

Peter Cardillo, chief market economist at New York-based Spartan Capital Securities, said: 'With the end of the quarter, we could get a bounce in the next few days'. "We can assess the fundamental drivers, such as poor global economics, the Fed not altering its forward guidance or providing flexibility to the pace of balance sheet normalization, and ascertain nothing has really changed here", he added. "But right now I just view it skeptically because this isn't normal price action".

Gold has also been soaring and was set for its biggest monthly increase in nearly two years, with many investors seeking havens amid intensifying global economic woes.

Benchmark U.S. crude climbed 8.7 per cent to settle at $46.22 a barrel in NY.

In that time, the S&P 500 quadrupled, the Dow did nearly as well, and the tech-laden Nasdaq index climbed 500 per cent, before starting their current declines.

Oil prices were a bright spot, with the U.S. benchmark oil price up by 10 per cent to $46.79 a barrel and the global benchmark price, Brent crude, increasing 9 per cent to $55.14.

CURRENCIES: The dollar eased to 110.90 yen from 111.37 yen late Wednesday. Amazon (AMZN), Facebook (FB), Alphabet (GOOGL), Netflix (NFLX) and Apple (AAPL) all fell between 1% and 4%. The euro strengthened to $1.1444 from $1.1351.

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