A decline in the dollar helped fuel a market rebound on Wednesday that nearly erased a big-sell off the day before brought on by fears of a slowdown in China.
Stocks had fallen more than 1 percent Tuesday after a surprise interest rate increase in China, the first time the country had raised rates in nearly three years. That made some traders concerned that slower growth in China might put a drag on the global economy.
Some of those concerns were erased after the Shanghai Composite Index, China's main stock market benchmark, rose slightly in overnight trading. Those gains "helped create a more constructive tone for the trade this morning," said Nick Kalivas, an equity analyst for MF Global.
The fact that China raised interest without leading to a drop in stock prices "was a sign of strength," said Sandy Mehta, the chief investment manager for Value Investment Principals, based in Hong Kong. "Raising rates show that they have confidence in their economy and it continues to grow strongly."
After the bell, West Coast technology companies Netflix Inc. and eBay Inc. reported stronger than expected revenues. Shares of both companies were up more than 6 percent in after-market trading. The strong results could help shift sentiment in favor of technology companies, which took a beating Tuesday after earnings from Apple Inc. and IBM Corp. didn't live up to investors' high expectations.
Every segment within the Standard and Poor index rose, led by a 1.9 percent jump in S&P's index of materials companies, a group that includes aluminum maker Alcoa Inc. and International Paper Co.
The dollar fell 1.2 percent against a broad basket of currencies as demand for safe-haven investments eased.
The Dow Jones industrial average rose 129.35, or 1.2 percent, to 11,107.97. The broader Standard and Poor's 500 index was up 12.27, or 1.1 percent, to 1,178.17, and the technology-focused Nasdaq composite index was up 20.44, or 0.8 percent, to 2,457.39.(source: yahoo finance)
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