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Kriss Kringle showed up on Wall Street after all, delivering a modest “Santa Claus rally” that investors hope will keep bears at bay.
The phenomenon, popularized by the Stock Trader’s Almanac in the early 1970s, refers to a tendency for the S&P 500
SPX,
to rally in the last five trading days of the calendar year and the first two trading days of the new year. A failure to rally in that stretch is seen by some analysts as a signal for more rough sledding ahead.
“If Santa Claus should fail to call, bears may come to Broad And Wall,” is the oft-quoted phrase from the late Yale Hirsch, founder of the Stock Trader’s Almanac.
Bears, of course, were already in abundance this time around. A bear market for the S&P 500 began a year ago Tuesday as the index began a slide from its Jan. 3, 2021, record close.
This time around, the period ran from Dec. 23 through Wednesday, Jan. 4. Stocks saw a shaky performance over that stretch, but a Wednesday bounce saw the S&P 500 end the period with a gain of 0.8%, extending a streak of such seasonal gains to a seventh year, according to Dow Jones Market Data.
That was below the average rise of around 1.3% over the period.
Outside the S&P 500, the Dow Jones Industrial Average
DJIA,
rose 0.7% in the period, while the Nasdaq Composite
COMP,
shed 0.17% and the small-cap Russell 2000
RUT,
gained 1.05%.
