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The stock market, left for dead in December, is racing back to life

The Dow gained 98 points on Monday, building on the recent recovery on Wall Street. The Nasdaq jumped 1.3%, while the S&P 500 advanced 0.7%.

While the market rally faded a bit by the end of the day — the Dow had been up 255 points at one point — the gains still build on Friday’s 747-point spike.

All told, the Dow has surged 1,750 points, or 8%, since Christmas Eve. Not bad for a market that suffered its worst December since the Great Depression.

So what’s driving the turnaround? Mostly it’s cautious optimism about the trade war and health of the Chinese and American economies.

Investors are hopeful that the United States and China will reach a breakthrough on trade talks that began on Monday in Beijing. Wall Street has been worried that the trade clash is deepening slowdowns in both economies.

Friday’s rally was set off by China’s efforts to stimulate its economy as well as soothing words from Federal Reserve chief Jerome Powell, who promised patience while raising interest rates. And the blockbuster December jobs report has removed the fear of an imminent recession in the United States.

Michael Block, market strategist at Third Seven Advisors, said that while some recent economic reports have been “troubling,” the market was due for at least a temporary rebound.

“When things are as beaten up as they are, the Street can move things around in the short-term,” he said.

Source: CNN

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