US stocks climbed in early trading Thursday and extended their recovery from a sharp sell-off that was triggered by concerns about the health of the Chinese economy.
Investors were encouraged by a surge in Chinese stocks. China’s main stock index logged its biggest gain in eight weeks.
There was also good news in the US as a report showed that the economy expanded at a much faster pace than previously estimated. Energy stocks were among the biggest gainers as oil climbed back above $40 a barrel.
The Dow Jones industrial average climbed 185 points, or 1.2 percent, to 16,472 as of 10:19 a.m. Eastern time.
The Standard & Poor’s 500 index gained 26 points, or 1.4 percent, to 1,966. The Nasdaq composite rose 71 points, or 1.5 percent, to 4,769.
Wall Street is rallying after its best day in close to four years Wednesday, as the market bounced back from a six-day slump, pushing the Dow up 619 points, or 4 percent. That was its third-biggest point gain of all time and its largest advance since Oct. 28, 2008.
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.
William Dudley, president of the New York Federal Reserve Bank, said Wednesday that the case for a US interest rate hike in September is “less compelling” given China’s troubles, falling oil prices and emerging markets weakness.
Following a six-year run-up in US stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon, choking economic growth.
SOURCE: NEW YORK POST
