Date
21 July 2017
A trader check stock prices on a monitor. US stocks got some help from signs an interest rate hike may not be imminent. Photo: Reuters
A trader check stock prices on a monitor. US stocks got some help from signs an interest rate hike may not be imminent. Photo: Reuters

Wall Street snaps six-day losing streak

US stocks rebounded sharply on Wednesday after running up six straight days of sharp losses caused by worries about China’s economy.

Long-term bonds fell after a top Federal Reserve official scaled back expectations of a September rate hike, Reuters reports.

The dollar rebounded for a second straight session as a firmer Wall Street and a recovery in shares eased pressure to switch to to safe-haven currencies such as the yen.

Oil prices fell after a drawdown in US crude stockpiles was offset by a larger than expected build-up in gasoline.

Influential New York Fed president William Dudley said earlier in the day that a rate increase next month seems less appropriate given the threat posed to the U.S. economy by recent global market turmoil.

Stocks were choppy for much of the day even though investors viewed the hint of caution about rate hikes as reassuring, but stocks gained momentum in the late afternoon, led by a big increase in the S&P 500 technology sector 

“This rally took a lot of people by surprise. A lot of people were anticipating the last half of the day would roll over and fall off and that hasn’t happened. You could see the buying accelerating at mid-day and people saying I’m wrong and starting to cover their shorts,” said Matousek.

The Dow Jones industrial average rose 619.07 points, or 3.95 percent, to 16,285.51. The S&P 500 gained 72.9 points, or 3.9 percent, to 1,940.51 and the Nasdaq Composite added 191.05 points, or 4.24 percent, to 4,697.54.

The Dow and the S&P notched up their biggest daily gains since November 2011 and Nasdaq had its biggest one-day jump since August that year.

But several investors cautioned that the market’s weak spell may not yet be over.

“We have an optimism that the sky is not falling today. It doesn’t mean it’s not going to fall tomorrow,” said Adam Sarhan, chief executive of Sarhan Capital in New York.

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CG/RA

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