Dow Jones surges over 400 points at opening bell as US markets rally

NYSE Wall Street

US stock markets rallied strongly on Wednesday as global stock markets attempted to shake off days of sell-offs amid fears that China’s economic boom is stalling.

The Dow Jones Industrial Average opened up over 400 points (2.62%) while the S&P was up 46.5 points (2.39%) and the Nasdaq was up 135 points (2.75%). All three indices closed down on Tuesday after an early rally proved unsustainable.

The US rally came as Asian and European markets fell. In China a rally on the Shanghai Composite index collapsed and the market closed down another 1.3%, to its lowest level since December. Over the past three days the index has lost close to a quarter of its value. In London the FTSE 100 index of leading blue-chip shares had shed 82 points, or 1.3%, as Wall Street prepared to open.

The US futures markets – an unreliable indicator of market trends – suggested a strong opening of more than 2% for the Dow Jones Industrial Average and S&P 500. Markets were preparing to open amid signs that the US economy is still on track. The Commerce Department announced on Wednesday that orders of durable goods (long-lasting manufactured goods) spiked by 2% in July, surprising economists who had expected a 0.4% decline.

But futures markets were also up ahead of Tuesday’s opening and initially the Dow put on 300 points as investors came back to the market. Those gains had all gone by the end of the day. Stock markets around the world have seesawed between gains and losses in recent days. The Dow lost 1,000 points early on “Black Monday” only to gain most of that back Tuesday and then lose it again.

Jack Ablin, chief investment officer at BMO Private Bank, said more volatility was likely in the coming weeks and stock markets were likely to lose more ground. Ablin said stock market gains had outpaced the growth in the real economy and a correction was inevitable. “We still have a relatively expensive market,” he said. “The economy is good but it’s not that good. The market is too far ahead of the wider economy.”

Powered by article was written by Dominic Rushe in New York, for on Wednesday 26th August 2015 14.43 Europe/ © Guardian News and Media Limited 2010


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