Wall Street stocks surge 2% as markets remain volatile

Wall St stocks jumped almost 2% yesterday in the latest volatile session as investors weighed the impact of a stumbling Chinese economy and global market turmoil on the Federal Reserve’s impending decision about when to raise interest rates.

US investors have weathered over two weeks of unusually wide-swinging trade that has left the S&P 500 with its worst monthly drop in three years and a loss of 8.5% from an all-time high in May.

“What we’re seeing today is not a recovery. It’s market volatility, it’s nervousness, it’s an inability to call the direction of the market,” said Jake Dollarhide, chief executive of Longbow Asset Management in Tulsa, Oklahoma.

“Through now and October we’re going to see a lot more of this, a lot of volatility,” he said.

The Dow jumped 1.82% to end at 16,351.31 points.

The S&P 500 climbed 1.83% to 1,948.85 and the Nasdaq Composite surged 2.46% to 4,749.98.

Other global stock indices recovered some of their recent losses yesterday, drawing support from reports of brokerage measures in China to invigorate the country’s battered markets, while US oil extended losses from the day before.

European equities also edged higher, building on early relief after Chinese stocks managed to bounce from steep losses before closing slightly lower.

The FTSE rose 24.8 points to 6,083.3 having fallen by nearly 200 points, or 3%, in the previous session. Germany’s Dax and France’s Cac 40 also climbed

Nine Chinese brokerages pledged to buy more than €4.2bn of shares, according to the China Securities Journal.

That eased investor fears that Beijing may be intensifying a trading crackdown.

The news stabilised global markets and soothed concerns that slowing growth in China will hurt the global economy.

European stocks were up 0.2%.

US data showed non-farm productivity rose at its strongest pace in one and a half years in the second quarter, keeping wage inflation subdued.

US Treasuries prices slipped after the fresh efforts in China to steady financial markets mitigated concerns about the world’s second-biggest economy and reduced demand for safe-haven US government debt.


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