The Dow was recently off 443.56 points, or 1.9 percent, at 22,434.89.
"If the market closes down for the year, which looks likely ... it will only be the 13th time that we've seen a full year decline since 1960", Zidle said.
USA stocks rebounded on Wednesday, staging one of the biggest rallies of the decade after coming within points of seeing the bull market end, with major indexes surging about 5 per cent and the Dow registering its biggest one-day point increase ever.
"The FTSE 100 is treating a 5.0-per cent surge in America's S&P 500 benchmark with a good degree of caution and it is easy to see why, even if that was the eighteenth biggest single-day gain in the USA index since 1970", said Mould. The Russell 2000 index of smaller-company stocks picked up 62.89 points, or 5 percent, at 1,329.81.
Volatility has been the norm this month.
Declining issues outnumbered advancers for a 4.52-to-1 ratio on the NYSE and for a 2.65-to-1 ratio on the Nasdaq.
US Markets Drop in Their Worst Day of Christmas Eve Trading Ever
Alongside last week's Fed hike woes were murmurs of a partial U.S. government shutdown , which has since gone into effect. The markets closed Christmas Eve down sharply, with the Dow dropping 653 points and the S&P 500 nearing a bear market .
Weighing on sentiment was President Donald Trump's comment that he was prepared to wait as long as it takes to get funding for his US-Mexico border wall, a demand that has triggered a partial shutdown of the federal government that is now in its fifth day.
Technology companies, a big driver of the market's gains before the October downturn, slumped Thursday. Advanced Micro Devices slid 6 percent to $16.82.
Perrigo lost 3.3 percent to $39.36, one of the big decliners in the health care sector. Energy stocks also rebounded with a almost 10-percent rise in oil prices on December 26. KeyCorp declined 2.5 percent to $14.35 as the yield on the 10-year Treasury fell to 2.76 percent from 2.79 percent late Wednesday.
It follows a strong recovery in oil prices overnight, as Brent crude soared 8.7 per cent to $US54.86 per barrel. Noble Energy slid 5.1 percent to $18.10.
ENERGY: Benchmark U.S. crude dropped 46 cents to $45.76 a barrel in electronic trading on the New York Mercantile Exchange.
Bond prices fell. The yield on the 10-year Treasury rose to 2.76 percent.
Indonesia tsunami: Wave crashes into pop concert by local band Seventeen
Among the victims were members of the Indonesian rock band called Seventeen, who were performing on stage as the tsunami hit. Roads and infrastructure are poor in many areas of disaster-prone Indonesia, making access hard in the best of conditions.
Investors also bought yen, pushing the dollar 0.4 per cent lower versus the Japanese currency and forcing it to cede some of its 1-per-cent overnight rise. The euro strengthened to $1.1444 from $1.1351.
Homebuilders mostly rebounded after an early slide following a report indicating that annual US home price growth slowed in October.
"We are reluctant to take too much from the post-Christmas surge or the break on December 24", Bruce Bittles, chief investment strategist at RW Baird, said in a note Thursday, adding that he needed to see two consecutive up days to confirm that market rebound is real.
"We've had times when we dropped 20 percent and went into recession but this is an example, so far, where the market realizes a recession isn't imminent, and going down 20 percent doesn't make sense", said Chris Zaccarelli, chief investment officer at the Independent Advisor Alliance.
ASIA'S DAY: Japan's Nikkei 225 index rebounded 3.9 per cent to 20,077.62.
Planned drawdown in Afghanistan imperils United States push for peace
Trump's aim is to eventually withdraw all 14,000 troops in Afghanistan over the next several months, the Journal reported.