A trader works at his post on the floor of the New York Stock Exchange (NYSE) in New York, U.S.,December 26, 2018. REUTERS/Jeenah Moon

One notable factor in Wall Street’s monster rally on Wednesday was a record gain in an index of stocks that have the largest bets placed against them by market contrarians.

The Thomson Reuters United States Most Shorted Index rose 6 percent, the biggest percentage rise in its six-year history, as some investors moved to cover bearish bets on the 51 stocks in the index, some of which were at their lowest price in years.

The gain came as the Dow Jones Industrial Average surged more than 1,000 points in a single session for the first time, in a broad stock rebound that pulled the benchmark S&P 500 index back from the brink of a bear market.

“This is a short-covering rally,” said Michael Antonelli, managing director of institutional sales trading at Robert W. Baird in Milwaukee.“The move you see is just everybody trying to get out of these super, super bearish positions that they have been in, that have been easy to make money in,” he said.

U.S. stocks have been battered this month by fears of slowing economic growth and worries about a potential conflict between the White House and the Federal Reserve, putting the S&P on pace for its worst December since the Great Depression.

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