(Reuters) – U.S. stocks roared back to end in positive territory on Thursday following steep losses for much of the session, as equities rebounded for a second day.
The failure of an initial selloff to gain more momentum lent credence to the idea that the extended bout of selling pressure may be coming to an end for now, investors said.
The gains come a day after the major indexes posted their biggest daily percentage increases in nearly a decade. The S&P 500’s two-day percentage gain of 5.9 percent is the best performance for the benchmark index since late August 2015 when the market was in the midst of a downturn over a slowing China.
Even so, all three major indexes remain down more than 9 percent for December. The S&P 500 is on track for its biggest annual percentage drop since 2008.
“The market is right now in a psychological frenzy, both good and bad,” said David Katz, chief investment officer at Matrix Asset Advisors in New York. “There’s fear of the market going down; there’s fear of missing the rebound.”
Stocks were lower for most of Thursday’s session, and strategists said such a pullback was to be expected following the huge jump on Wednesday, when the Dow Jones Industrial Average rose 1,000 points for the first time.
Almost in unison, stocks across market sectors began rising around 2:30 p.m. ET, shortly after the S&P 500 briefly broke below 2,400, a level that has been repeatedly tested during the last several days of choppy trading.
From there the index surged