US stocks bounce back after posting early losses

PHOTO: Trader Frederick Reimer works on the floor of the New York Stock Exchange, Jan. 2, 2019. Stock markets started the new year with a tumble, as disappointing Chinese economic data renewed concerns that a global trade war is weighing on growth.PlayRichard Drew/AP
WATCH News headlines today: Jan. 2, 2019

U.S. stocks have bounded have starting the new year in negative territory.

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All major U.S. indices were up in early afternoon trading.

President Trump on Wednesday told reporters that there was a "glitch" in the stock market last year and predicted stocks will recover their losses after trade negotiations are settled.

On Monday, the Dow ended its worst year in a decade after a month of highly volatile trade, with losses also dragging the Nasdaq into bear territory.

"I think the only explanation is that we've had this really nice rebound," Craig Johnson of Piper Jaffray told ABC News. "We sold off really hard, and then we had a relief rally. It's not tax law selling anymore, that's already done, that was over in December, and Chinese industrial production was really weak."

"Institutional investors are talking about China and what's going on there rather than what's going on in Washington," Johnson added.

Investors were also jittery after The New York Times reported that U.S. trade representative Robert Lighthizer was urging President Trump to hold the line on trade negotiations with China, signaling that the escalating trade war could get worse.

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