Dow gains more than 300 points Thursday as Wall Street attempts a year-end rebound

Stocks jumped on Thursday, as investors headed into the final trading days of 2022.

The Dow Jones Industrial Average rose 385 points, or 1.2%. The S&P 500 gained 1.8%, and the Nasdaq Composite climbed 2.5%.

The Dow and S&P are up 0.2% each for the week, while the Nasdaq is down 0.2%.

Louis Navellier, founder and chief investment officer of growth investing firm Navellier & Associates, called it an “abbreviated one-day version of a Santa Rally.”

“We were overdue for a rebound, and a lot of the recent weakness may be explained by further tax loss selling once the Santa Rally didn’t materialize,” he said. “We’ll have further volatility into the new year with plenty of uncertainty about whether a soft landing is possible and if not how much resolve the Fed will have to not pivot if we tip into a serious recession.”

Apple shares rebounded after four consecutive days of losses, rising more than 3%.

The market pushed higher early Thursday after the Labor Department reported an increase in jobless claims from last week, amid Federal Reserve efforts to cool the economy and in particular the labor market.

First-time filings for unemployment benefits totaled 225,000 for the week ended Dec. 24, according to the report. That was an increase of 9,000 from the previous week and slightly above the 223,000 estimate from Dow Jones.

The market action follows a broad selloff during the regular session Wednesday as recession fears weighed on investor sentiment in a losing month and year. The Dow lost 365.85 points, or 1.1%. The S&P 500 fell 1.2%, while the Nasdaq Composite dropped 1.35%.

The major averages are headed toward their worst year since 2008. The Dow has lost 8.8%, while the S&P 500 shed 19.7%. Meanwhile, the Nasdaq is the laggard of the three, down 33.6% as investors dumped growth stocks.

“Investors are anticipating an economic recession to materialize early in 2023, as evidenced by the three quarters of projected S&P 500 earnings declines and continued defensive sector leanings,” said Sam Stovall, chief investment strategist at CFRA Research. “The severity of the recession remains in question. We expect it to be mild.”