US stocks snapped a six day loosing run to chalk up their biggest one day percentage gain as worries mover the global economic outlook were outweighed by positive US economic data and expectations that the Federal Reserve might not raise the interest rates next month.
The rally was mostly driven by massive gains by the Silicon Valley giants including Apple Inc., Google and Amazon.
The S&P 500 Index added 72.90 points or 3.9% to settle at 1,940.51 points with all its ten sectors ending higher on the day. The tech sector was the biggest gainer with a 5.4% advance on the day.
The Dow Jones Industrial Average advanced 619.07 points or 4% to end at 16,285.51 points with all of its 30 components ending the day higher.
The technology heavy Nasdaq Composite added 191.45 points or 4.2% to end at 4,697.54 points.
“I think everyone’s kind of waiting to see what happens and if there’s a next shoe to drop,” Darren Wolfberg, head of U.S. cash equity trading at BNP Paribas., told the Wall Street Journal.
The CBOE volatility index reported that volatility in the benchmark S&P 500 Index fell by 15% to about 30 but still remained way higher than the historical average of 20.
The Federal Reserve of New York President William Dudley, a member of the Federal Reserve policy team, on Wednesday gave the biggest hint yet that the worries over a faltering Chinese economy could affect US monetary policy.
Mr. Dudley told Reuters that the case for a rate hike in September now seemed “less compelling” than it was a few weeks ago.
Also driving the late session rally was a positive reading on the US’s business investment and reports that demand for big-ticket manufactured goods grew more in July than in June. The july reading was better than widely expected while the June reading was revised upward.
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