Confidence returned to U.S. markets Thursday, as both the Dow Jones and Nasdaq indexes escaped correction territory. On an intraday basis, both indexes are up 2 percent (375 and 87 points, respectively), near their session highs. The S&P 500 is up 37 points.
This serves as the largest 2-day gain for both the Nasdaq and the S&P since 2009. The rally is linked with many factors, including the Federal Reserve calming down on a rate hike, strong U.S. economic data, and the performance of commodities.
Strong Economic Data
Positive economic data may be a catalyst for the newfound confidence in our markets. Improved government spending helped the economy expand 5.6 percent in the second quarter. In addition, U.S. jobless claims are down for the first time in 5 weeks. Also, the average rate on a 30-year mortgage dropped to 3.84 percent.
Commodities Finally Performing
Commodities are rallying as well. Although gold is still trending lower, copper and oil are vastly improving. Crude oil had its best day since March 2009 - up 10 percent to $42 a barrel. Copper futures are up 4 percent, to $233.
The surge in crude oil has triggered a spike in shares of numerous public energy suppliers. Chesapeake Energy (NYSE: CHK) is up 9 percent, Consol Energy (NYSE: CNX) is up 16 percent, and Freeport-McMoran Copper (NYSE: FCX) is up a huge 31 percent.
It will be enticing to see if markets can keep their momentum going in a week that has seen so many ups and downs.