US stocks rebound in best day for four years
An afternoon surge has given the US stock market its best day in close to four years, as stocks rebounded from a six-day slump.
The three major US indexes dropped six days in a row heading into Wednesday amid concerns that China’s economy is weaker than investors had previously thought. That was the longest market slide in more than three years.
The Dow fell about 1,900 points over that period, while the slump wiped more than two trillion dollars off the value of S&P 500 companies.
The Dow Jones industrial average rose 619.07 points, or 4%, to 16,285. The Standard & Poor’s 500 index gained 72.9 points, or 3.9%, to 1,940, giving the index its best day since November 2011. The Nasdaq composite gained 191 points, or 4.2%, to 4,697.
Markets have been volatile since China decided to weaken its currency earlier this month. Investors interpreted the move as an attempt to bolster a sagging economy.
Traders are also jittery about the outlook for interest rates. The Federal Reserve has signalled it could raise its key interest rate for the first time in nearly a decade later this year.
New York Fed President Bill Dudley said the case for a rate increase next month had become “less compelling” in recent weeks, which may have added fuel to the market gains.
However, he also stated that the situation could still change before the Fed’s next policy meeting scheduled for mid-September.
Investors were also following the latest corporate deal and earnings news. Technology stocks were among the biggest gainers.
Despite the increase, US manufacturers still face a host of problems from a stronger dollar to falling oil prices and turbulence in China, the world’s second-biggest economy.
