Feb. 2 (UPI) — After suffering their worst December in almost 90 years, U.S. stocks rebounded in spectacular fashion in January.
U.S. markets notched the best January in 30 years, fueled by positive news from the Federal Reserve.
The Dow Jones Industrial Average rose 7.2 percent, the best January mark since 1989. The S&P grew almost 8 percent, which was its best January since 1987.
“A lot of what happened in the fourth quarter of last year was just massive fear, and so we’ve seen that sort of being flushed slowly out of the market,” S&P Global’s Erin Gibbs told CNBC.
Gibbs said investors have an appetite for stocks again, but she isn’t expecting the same type of growth all year.
Federal Reserve Chairman Jerome Powell remained cautious while pointing to strength in the labor market and tepid inflation.
Bank of America saw shares rise 16 percent in January. Other banks saw similar rallies.
“Our view is through our customers and this strongly supports a solid growth view,” Bank of America CEO Brian Moynihan said last month.
Instinet’s Frank Cappelleri said while small businesses are posting gains on the S&P 600, that index is still down 18 percent from its recent high. Gold prices continue to rise, a potential warning sign for future stock prices. Thursday, they surged to the highest level since last April.
The U.S. labor market also had a great month in January. Federal officials said Friday 304,000 new jobs were added for the month, far above analysts’ projections.