From famine to feasting for the bulls on Wall Street this week.
A series of gains for the Dow Jones Industrial Average
is setting the stage for its best start to a December, a notably bullish month for stocks, since 1997, according to Dow Jones Market Data.
The Dow is up 3.7% so far in December, FactSet data show, which would represent the best first five trading sessions on the month for the blue-chip stock market index, since a 4.17% gain in 1997.
At last check, the Dow was up 544 points, or 1.6%, to around 35,768, up nearly 1,200 points in the past two sessions.
The surge comes after blue chips finished a withering stretch to end November, which brought the Dow half way to a correction, down 5.1%, as of last Friday’s close. But conditions that have been deemed “oversold” on Wall Street have reignited the bulls, which had chastened by the emergence of the omicron variant of the coronavirus that causes COVID-19.
Concerns about the Federal Reserve’s monetary policy plans also haven helping to cap gains for investors. The Fed is expected to accelerate the tapering of monthly purchases of Treasurys and mortgage-backed securities, which had buttressed the market during the height of pandemic volatility but have been deemed unnecessary as evidence of surging inflation grows.
It isn’t clear if the narrative for stocks has changed demonstrably for the bulls but bond yields remain at historically low levels, perhaps supporting a return to risky assets like information technology and energy stocks, which were leading the charge higher on Tuesday.
So how does the Dow perform when it sees a gain of at least 3% in the first five sessions in December?
The blue-chip index tends to post an average gain for the entire month of 4.7% or a median gain of 5.2%, when the DJIA gains 3% or more through the first five trading days of December.
For its part, the Dow has been a laggard so far in 2021, falling behind the year-to-date returns of its peer benchmarks, which were also in rally mode on Tuesday. For the year, the Dow is up 16.9%, while the S&P 500 index
has gained nearly 25% and the Nasdaq Composite Index
has climbed 21%.
—Ken Jimenez contributed to this article