US stocks end higher after afternoon surge; best day in 4 years
ALEX VEIGA, AP Business Writer
U.S. stocks are closing sharply higher, giving the stock market its best day in close to four years.
Stocks are rebounding from a six-day slump that was prompted by concerns about the health of the Chinese economy.
The Dow Jones industrial average climbed 619 points, or 4 percent on Wednesday.
The Standard & Poor’s 500 index jumped 72 points, or 3.9 percent, to 1,940. That’s the biggest gain for the index since November, 2011.
The Nasdaq composite surged 191 points, or 4.2 percent, to 4,697.
Treasury notes fell, pushing up the yield on the benchmark 10-year note to 2.18 percent from 2.07 percent on Tuesday.
Cameron International, a maker of equipment for the oil industry, jumped 41 percent after Schlumberger said it was buying the company in a cash-and-stock deal.
The three major U.S. indexes dropped six days in a row heading into Wednesday. That’s the longest market slide in more than three years. The Dow had fallen about 1,900 points over that period, while the slump wiped more than $2 trillion off the value of S&P 500 companies.
A strong rebound on Tuesday evaporated in the final minutes of trading and the Dow ended more than 200 points lower. On Wednesday, instead of sagging, the market surged in the final hour of trading.
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 signaled it could raise its key interest rate for the first time in nearly a decade later this year. The Fed isn’t expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.
Investors were also following the latest corporate deal and earnings news. Technology stocks were among the biggest gainers.
THE QUOTE: “There’s a lot of cash on the sidelines waiting to get in, so to the extent that there’s any sort of bottom seen, that will increase people’s confidence and boldness,” said Erik Davidson, chief investment officer for Wells Fargo Private Bank.
ECONOMIC BELLWETHER: The Commerce Department said orders for durable goods, or items expected to last at least three years, rose 2 percent last month after a 4.1 percent gain in June.
Despite the increase, U.S. 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.
OIL DEAL: Cameron International, a maker of equipment for the oil industry, jumped 41 percent after Schlumberger said it was buying the company in a cash-and-stock deal. Cameron rose $17.27 to $59.75.
NEVER MIND: Monsanto shares climbed 8.6 percent on news that the agricultural products maker has decided to abandon its takeover bid for rival Syngenta. The stock gained $7.70 to $97.05.
EUROPEAN ACTION: Germany’s DAX was down 1.3 percent, while France’s CAC 40 fell 1.4 percent. Britain’s FTSE 100 fell 1.7 percent.
ASIA’S DAY: Markets in Asia were mixed. Japan’s Nikkei 225 stock index rose 3.2 percent. But Hong Kong’s Hang Seng index fell 0.5 percent to 21,305.17, and mainland China’s smaller Shenzhen Composite lost 3.1 percent.
ENERGY: Benchmark U.S. crude fell 71 cents to $39.10 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell 70 cents to $43.14.
BONDS AND CURRENCIES: U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.17 percent from 2.07 percent late Tuesday. The dollar rose 0.6 percent against the yen to 119.37. The euro dropped 1.3 percent to $1.1380.
METALS: Gold fell $13.70 to $1,124.60 an ounce. Silver dropped 56.9 cents to $14.04 an ounce. Copper fell 6.6 cents to $2.25 a pound.