Rally powers rebound in US stocks a day after slump

Associated Press

Solid gains among phone companies and some retailers helped nudge U.S. stocks higher Thursday, a day after the stock market had its biggest drop in eight months. Banks also recouped some of their losses. Energy and materials stocks fell.

The rally came a day after the market’s worst drop since September as political tumult deepened in Washington, stoking worries among investors that President Donald Trump may have trouble enacting tax cuts and other business-friendly policies.

“People may be wanting to put money to work in stocks, but the bonds they bought yesterday, they’re still going to keep those as a little bit of a hedge, just in case,” said JJ Kinahan, chief market strategist at TD Ameritrade.

Despite the day’s gains, the major stock indexes were still on course to end the week in the red.

Stocks appeared headed for another down day early Thursday following sell-offs in Asia and Europe. But better-than-expected quarterly results from Wal-Mart Stores and retailers such as L Brands helped lift the market.

Wal-Mart gained $2.42, or 3.2 percent, to $77.54, while L Brands rose $1.29, or 2.7 percent, to $49.69.

Traders also welcomed data from the Labor Department showing that applications for unemployment benefits fell last week to the lowest level in nearly three months.