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For the second day in a row, stocks had their best day of the year. After a huge rally on Wednesday, stocks topped these gains on Thursday, with the Dow gaining more than 400 points and all of the major equity indexes adding more than 2%. This was the biggest two-day rally for stocks since 2011 and the biggest one day gain for the S&P 500 since January 2013.


First, the scoreboard:

  • Dow: 17,775, +418, (+2.4%)
  • S&P 500: 2,061.1, +48.2, (+2.4%)
  • Nasdaq: 4,748.4, +104, (+2.2%)

And now, the top stories on Thursday:

1. Crude oil fell again. For the second day in a row, crude oil futures staged rallies that were quickly reversed. On Thursday, West Texas Intermediate crude futures rose to as much as $59 a barrel before falling all the way back towards $54, eventually settling at right around $55 a barrel. 

2. The market was still digesting the Federal Reserve's latest policy statement released on Wednesday, particularly the change in the Fed's language. On Wednesday, the Fed dropped the phrase "considerable time" from its forward guidance, opting to say that the Fed would remain "patient" in beginning its cycle to raise interest rates. In a note to clients following the report, Bank of America Merrill Lynch outlined some of the points from Wednesday's commentary out of the Fed. The big takeaway? The Fed is going to raise rates next year. 


3. In an afternoon email, the New York Stock Exchange's Rich Barry said the Santa Claus rally is back on. "Janet Yellen, escorted by Santa on his sleigh, made the declaration that the Santa Claus Rally is set to begin. For a little historical perspective, since 1969, the S&P 500 has averaged a 1.5% gain during the last five trading days of the year and first two sessions of the New Year, according to Stock Trader's Almanac. We have just three words to describe how we think the market will close out 2014: Ho! Ho! Ho!"

4. Russian President Vladimir Putin held a three-hour press conference on Thursday, speaking on Russia's economy and the recent collapse of the Russian ruble. Some of the highlights from Business Insider's Pamela Engel include Putin's insistence that Russia would dig out of its economic crisis in two years, Putin's refusal to call the ruble's collapse a crisis, and Putin comparing the Russian invasion of Crimea to taking Texas from Mexico. 

5. A report from Bloomberg on Thursday, however, made clear that for Russia's richest citizens, the recent economic downturn has been a disaster: in just the last year, the 20 richest Russians have lost a combined $62 billion in net worth.

6. We got labor market data this morning from the weekly report on initial jobless claims, which fell to 289,000 from 295,000 last week, while the four-week moving average of claims declined from last week. In a note to clients following the report, Ian Shepherdson at Pantheon Macro said that assuming the hiring side of the payroll equation remains strong, the trend in claims indicates payroll growth remains strong. 

7. The December manufacturing report from the Philadelphia Federal Reserve missed expectations and was sharply lower from November's reading, though economists called last month's number "mind-boggling." The report still showed that businesses surveyed remained optimistic on their outlook for the next six months.


8. Activity in the US service sector slowed to 53.6 from 56.2 last month, the weakest headline reading since October 2013, but still indicating growth in the service sector. Markit's Chris Williamson said following the report that, "The slowdown is linked to weaker growth of new business as customers becoming increasingly worried about the economic outlook both at home and abroad, with the prospect of higher interest rates cooling demand alongside side rising global geopolitical concerns."

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