US stock rally raises hopes markets will steady
In this Tuesday, Sept. 8, 2015, file photo, a Wall Street street sign is framed by a giant American flag hanging on the facade of the New York Stock Exchange. AP FILE PHOTO
NEW YORK, United States—US stocks staged a rally Thursday, shaking off early losses as a bounce in oil prices lifted sentiment and helped propel a 1.7 percent gain in the S&P 500.
The advance in the US marked a partial recovery from an ugly session Wednesday that left US markets sharply lower on worries about the oil rout and slowing global growth.
The Wall Street rebound cut short a chain of market losses in Tokyo, Hong Kong and Europe and fed hopes that markets could steady after nerve-wracking volatility.
Tokyo lost 2.7 percent, Frankfurt 1.7 percent, Paris 1.8 percent and London 0.7 percent.
“This is the first rally that’s held until the close,” said Chris Low, chief economist at FTN Financial. “We may have finally exhausted the selling wave.”
Besides higher oil prices, sentiment was lifted by comments emphasizing worries about low inflation from James Bullard, head of the Federal Reserve’s St. Louis branch.
The Bullard comments suggested the Fed was paying attention to the market turmoil and might be cautious about additional rate hikes after increasing the federal funds rate for the first time in nine years in December.
Analysts said the investors were also cheered by gains in the Chinese stock market and by a strong fourth quarter report from JPMorgan Chase to kick off earnings season for big banks in the United States.
“Things probably will calm down,” Low said. “The biggest complicating factor is China.”
Automakers found themselves mired in controversies.
Shares in Renault plunged over 20 percent at one point after French anti-fraud agents raided several of its facilities in a probe related to emissions.
The automaker said those tests had not found any software to cheat pollution tests like that Volkswagen has admitted installing on over 11 million diesel vehicles.
Shares in Fiat Chrysler Automobiles tumbled 7.9 percent in Milan and 4.2 percent in New York after two US dealerships accused the carmaker of inflating sales numbers.
Fiat Chrysler said that it “believes that the claim is without merit” and labelled the lawsuit “nothing more than the product of two disgruntled dealers who have failed to perform their obligations.”
Other European automakers also fell sharply, with Daimler losing 3.6 percent, BMW 3.4 percent and Peugeot 5.0 percent.
Volkswagen, which faces tens of billions of dollars in possible fines in the United States alone over the pollution test cheating software, saw its shares fall 3.7 percent.
Key figures around 2200 GMT
New York – Dow: UP 1.4 percent at 16,379.05 (close)
New York – S&P 500: UP 1.7 percent at 1,921.84 (close)
New York – Nasdaq Composite: UP 2.0 percent at 4,615.00 (close)
London – FTSE 100: DOWN 0.7 percent at 5,918.23 points (close)
Frankfurt – DAX 30: DOWN 1.7 percent at 9,794.20 (close)
Paris – CAC 40: DOWN 1.8 percent at 4,312.89 (close)
EURO STOXX 50: DOWN 1.6 percent at 3,024.00 (close)
Tokyo – Nikkei 225: DOWN 2.7 percent at 17,240.95 (close)
Shanghai – Composite: UP 2.0 percent at 3,007.65 (close)
Euro/dollar: DOWN at $1.0865 from $1.0874 Wednesday
Dollar/yen: UP at 118.06 yen from 117.72 yen
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