US stocks closed the month on more stable footing after one of the most turbulent yearly starts in the market's history.
The upswing Friday followed a surprise monetary stimulus measure from the Bank of Japan. All three major indexes rose about 2.5 per cent, marking the largest one-day gain in four months. The Dow Jones industrial average rose 396.66 points, or 2.5 per cent, for the day, but still ended the month down nearly 8 per cent. The Standard & Poor's 500-stock index and the tech-heavy Nasdaq also posted significant losses for the month.
Crude oil prices, meanwhile, inched up 1.2 per cent to close at $33.62 per barrel as they struggled to recover from 12-year lows.
Strong corporate earnings from Microsoft and Visa also helped lift stocks. Shares of Microsoft were up nearly 6 per cent following higher-than-expected revenue and profit figures, while Visa's shares rose about 7 per cent.
But, economists warn, this is probably not the end of a raucous ride as investors contend with a slower-than-expected global recovery.
"Volatility is going to persist," said Liz Ann Sonders, chief investment strategist at Charles Schwab. "It's going to be a very, very choppy year."
Markets have been on a roller-coaster this year, wiping out as much as $7.8 trillion in value worldwide, according to Bloomberg.
Plummeting oil prices and volatility in Chinese markets are driving much of the turbulence on Wall Street. Crude oil, which exceeded $100 a barrel two years ago, has fallen dramatically in recent months amid fears of a global oversupply. A sell-off in China further exacerbated fears that the world's second-largest economy might be worse off than investors had anticipated.
"We've seen sentiment reach an unbelievable extreme of pessimism," Sonders said.
On Wednesday, the Federal Reserve acknowledged that the US recovery was not as robust as it had estimated in December, when it decided to raise its benchmark interest rate for the first time in nearly a decade - to between 0.25 and 0.5 per cent.
In other economic news Friday, gross domestic product, a measure of the country's overall output, grew at a tepid 0.7 per cent annual pace in the fourth quarter, the Commerce Department reported. That figure was roughly in line with forecasts but hardly encouraging for an economic recovery well into its sixth year.
Globally, after the Bank of Japan surprised investors overnight by cutting a key interest rate, stocks and bonds climbed into negative territory for the first time ever, to minus 0.1 per cent, effectively paying banks to park their reserves at the central bank.
Japan's Nikkei average rose 2.8 per cent as a result, while Hong Kong's Hang Seng index climbed 2.66 per cent. European markets also posted gains, with a boost in trading volume.
Earlier in the month, China unleashed three giant stimulus measures to help shore up its flagging economy. The European Central Bank also hinted that it might take further action during its March meeting.
Although those efforts seem to have helped stabilise markets, economists say they may not be enough.
"There is lingering concern in the market that there are some limits to just how much further stimulus can be provided, at least on the monetary side," said Michael Hanson, senior global and US economist for Bank of America Merrill Lynch. "Is there enough ammunition out there, if there was a much bigger shock to the global economy, to actually right the ship?"