Coverage: Stock market turns positive for 2016

The Dow Jones Industrial Average rose 156 points on Thursday, putting it in the black for the year after being down by as much as 10 percent earlier in 2016.

David Craig and Jane Onyanga-Omara of USA Today had the day’s news:

For the day, the Dow climbed 156 points, a 0.9% gain, to 17.481 — 56 points above its 2015 close. The rally extended gains from Wednesday when the Federal Reserve’s left interest rates unchanged and scaled back its plans for further hikes this year.

The broader Standard & Poor’s 500 also briefly moved into the black for 2016 before fading to end with a 0.2% year-to-date loss.

The Nasdaq composite, still about 5% below its 2015 close, gained 0.2%.

The recent turnaround in stocks has been stoked by a rebound in oil prices and an easing of recession fears. Oil prices rose again Thursday as U.S. benchmark crude jumped 1.4% to $40.20 a barrel — its first time above $40 since Dec. 4.

Adding to the enthusiasm was the news that the Fed lowered its plan to two more quarter-point hikes this year, down from the four it had predicted previously. The new plan was more aligned with Wall Street analysts’ expectations.

Aaron Kuriloff of The Wall Street Journal points out how a weaker dollar could boost the market:

Fed Chairwoman Janet Yellen noted the improving jobs picture Wednesday but added “there’s still room for improvement.”

The WSJ Dollar Index, which measures the U.S. dollar against a basket of currencies, fell 0.9%. The prospect of lower interest rates tend to make a currency less attractive to investors seeking yield.

A weaker dollar should benefit companies that sell goods overseas, said Susan Bao, portfolio manager at J.P. Morgan Asset Management.

“The dollar will put less downward pressure on corporate earnings,” she said.

Stock-trading volumes have been relatively light in recent sessions.

Evelyn Cheng of CNBC.com writes about how transportation stocks boosted the overall market:

The Dow transports closed up 2.98 percent, topping its 200-day moving average for the first time since May 8, 2015 as FedEx had its best day since 1993 with gains of 11.8 percent.

U.S. crude oil futures settled up 4.5 percent at $40.20 a barrel, its highest settle of the year so far.

Traders also attributed some of Thursday’s gains to Friday’s options expiration.

“I think (the rally Thursday) is probably the recognition the Fed is responding to the weaker environment and they’re not going to tighten as quickly,” said Jack Ablin, chief investment officer at BMO Private Bank.

Still, he remained cautious on the recent rally given historically high valuations in the S&P 500. The recovery year-to-date “is just a reminder of how expensive the market is,” he said. “When the market falls during earnings season it just shows fundamentals just can’t support prices.”