US close: Stocks close higher, erasing earlier losses

US stocks closed higher on Thursday, erasing sharp losses earlier in the session to continue solid gains recorded a day earlier despite concerns about Sino-US relations resurfacing.

At the close, the Dow Jones Industrial Average was 1.14% higher at 23,138.69, while the S&P 500 was up 0.86% at 2,488.80 and the Nasdaq was 0.38% stronger at 6,579.49.

The Dow staged a late rally to wipe out earlier losses and close 260 points higher on Thursday, following its 1,000 point surge in the previous session, its biggest one-day points gain ever, to help bounce back from the Street’s worst-ever Christmas Eve performance earlier in the week.

Stocks in the US had rallied on the back of Mastercard data showing that sales during the holiday season rose the most in six years in 2018 and after Kevin Hassett, chairman of the White House Council of Economic Advisers, affirmed that Fed chairman Jerome Powell’s job was "100% safe".

Adding to the upbeat tone was news that a US government delegation will head to Beijing in January to hold trade talks with Chinese officials.

The positive mood was short-lived, however, with traders likely stepping in to book some profits.

On the macro font, figures released by the Labor Department earlier showed the number of Americans filing for unemployment dipped a touch last week.

US initial jobless claims fell by 1,000 from the previous week’s revised level to 216,000. The previous week's level was revised up by 3,000 to 217,000. Economists had pencilled in a level of 217,000. Meanwhile, the four-week moving average declined by 4,750 to 218,000. The previous week's average was revised up by 750 to 222,750.

The four-week average is considered more reliable as it smooths out sharp fluctuations in the more volatile weekly figures, giving a more accurate picture of the health of the labour market.

Elsewhere, West Texas Intermediate slipped 1.17% to $45.68 a barrel on Thursday and Brent Crude dropped 2.22% to $53.26.

The USD dipped 0.16% against the GBP to 0.7903.

In corporate news, Boston Scientific picked up 2.38% after analysts saw its takeover of Millipede as a good strategic fit for the firm, while Adept shares ticked ahead 0.68% despite being hit with a fine for dodging reporting guidelines by the SEC.