US stocks open slightly lower after sharp two-day surge

30 Aug 2015 | Author: | No comments yet »

Global Stock Markets Surge, Ending Days of Huge Losses.

New York – Wall Street rallied more than 2 percent on Thursday as strong US economic data and hints that a September interest-rate hike was unlikely fuelled optimism that the worst of recent market turmoil was over.

In a volatile trading session in New York, the Standard & Poor’s 500, Dow Jones industrial average and NASDAQ composite index each gained well over 2 percent. Well, so far it has been able to do that and today’s data really puts a line under that.” Even if the Fed does not tighten policy in September, expectations of an eventual hike will remain a major overhang on sentiment, warned Jim Bianco, president of Bianco Research in Chicago. “The era of easy money would officially be over,” Bianco said. “A rate hike would mean putting the needle away, no more drugs, time for the methadone.” To that end, investors will keep an eye on an annual conference of some of the world’s top central bankers in Jackson Hole, Wyoming over the next few days for further clues on interest rates.

All 10 major S&P sectors rose sharply, with the energy index’s 4.9 percent jump leading the advancers as oil prices soared more than 9 percent in one of the biggest one-day rallies in years. That apparently was an effort to stabilize the market ahead of the September 3 military parade celebrating the 70th anniversary of the World War II victory over Japan. The S&P 500’s valuation was about 15.4 times expected earnings as of Wednesday’s close, compared to around 17 for much of 2015, according to the most recent available Thomson Reuters StarMine data. Over a longer period, the Chinese market had tumbled 42 percent since its mid-June peak, erasing more than $5 trillion in value as traders worried that the stock values were too high, with prices unjustified by China’s slowing economy. About 9.9 billion shares traded on US exchanges and the 15-day moving average of 8.1 billion was the highest this year, according to Thomson Reuters data.

And Alan Valdes at DME Securities blamed the market volatility on lower volumes typical of the summer months, coupled with uncertainty and eroding confidence about Beijing’s monetary policies. Verified email addresses: All users on Independent Media news sites are now required to have a verified email address before being allowed to comment on articles. Beijing unexpectedly allowed the yuan to weaken earlier this month, raising concerns Beijing was worried about its exporters, who have helped drive its massive economic growth.

On Thursday, China’s central bank set its central rate for the yuan at a four-year low, at 6.4085 against the U.S. dollar, or about .07 percent weaker than the previous day.

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