The Santa Claus stock market rally got off to a sizzling start Tuesday, as stocks leapt to their strongest Christmas Eve showing in five decades, stuffing the stockings of many investors.
The New York Stock Exchange lit up for Christmas.
The benchmark S&P 500 rose 1.1% in shortened trading, the first session of the Santa Claus rally period that historically brings stronger-than-average returns, for the S&P, which tracks 500 of the largest American public companies and is the most commonly cited benchmark tracking the performance of the stock market.
That’s the best Dec. 24 gain since 1974, according to FactSet data.
Tuesday’s rally was broad, as more than 90% of stocks listed on the S&P gained.
Tesla, the automaker helmed by the world’s richest person Elon Musk, was the top percentage gainer on the index, tacking on 7.4%, while other notable stocks rising at least 2% included Netflix, Starbucks and Walmart.
There were no major economic, earnings or news catalysts Tuesday, reflected in the unusually low trading activity even for a holiday-shortened session (markets closed at 1 p.m. EST). In fact, Tuesday was the lowest volume day for the S&P since March 2, 2011, according to Yahoo Finance data.
The term refers to the phenomenon of better-than-average stock market returns over the final five trading days of a year and first two sessions of the following year. Since 1950, the S&P has gained 1.3% on average over that seven-session period, far outstripping the 0.3% average advance over a typical seven-day stretch, according to LPL Financial research. This year’s Santa Claus rally lasts from Tuesday to next Friday.
It’s been a December to remember for stock market historians. Earlier this month, the Dow Jones Industrial Average suffered its longest losing streak in 50 years, falling for 11 consecutive trading sessions. The Dow, which tracks 30 American companies, has gained more than 2% since breaking the losing streak last week.