After a brief omicron scare, the Dow is now poised for the best start to a December in 24 years. Here’s what history says happens next.

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From famine on Wall Street to a feast for the bulls this week.

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A series of gains for the Dow Jones Industrial Average (DJIA),
+1.24%
A particularly bullish month for stocks is setting the stage for its best start to December, according to Dow Jones market data, since 1997.

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The Dow is up 3.7% so far in December, FactSet data show, which would represent the best first five trading sessions of the month for the blue-chip stock market index since a 4.17% gain in 1997.

At the time of last investigation, the Dow was up 544 points, or 1.6%, at around 35,768, up nearly 1,200 points over the past two sessions.

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The bounce came after the end of November ended a withered stretch of blue chips, which brought the Dow for a correction down 5.1% from last Friday’s close. But conditions deemed “oversold” on Wall Street have reignited the bulls, followed by the emergence of the Omicron version of the coronavirus that causes COVID-19.

Concerns about the Federal Reserve’s monetary policy plans have also helped limit gains for investors. The Fed is expected to accelerate the tapering of monthly purchases of Treasury and mortgage-backed securities, which smothered the market during the height of the pandemic’s volatility but have been deemed unnecessary as evidence of rising inflation.

It’s not clear if the stock’s story has changed markedly for the bull market, but bond yields remain at historically low levels, perhaps favoring the return of riskier assets like information technology and energy stocks, who was leading the high charge on Tuesday.

So how did the Dow perform when it saw gains of at least 3% in the first five sessions in December?

When the DJIA gains 3% or more in the first five trading days of December, the blue-chip index posts an average gain for the entire month of 4.7%, or an average gain of 5.2%.

For its part, the Dow has been lagging so far in 2021, lagging the year-over-year returns of its counterpart benchmarks, which were also in rally mode on Tuesday. For the year, the Dow is up 16.9%, while the S&P 500 index SPX,
+1.87%
about 25% and the Nasdaq Composite Index comp,
+2.78%
has climbed 21%.

—Ken Jimenez contributed to this article

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