US Stocks Spike Post Holiday On Upbeat China News
$AAPL, $AMZN, $WFC, $GM, $VXX, $SPY, $DIA, $QQQ
US stocks rose, following the Standard & Poor’s 500 Index’s 2nd-biggest weekly retreat this year, after a late rally in Chinese stock markets led global equities North.
Apple Inc. (NASDAQ:AAPL), Amazon.com Inc. (NASDAQ:AMZN), Wells Fargo & Co (NYSE:WFC). and General Motors Co (NYSE:GM) all posted gains of at least 2.1% in a broad-based rally as participants returned from the Labor Day holiday.
The S&P 500 jumped 2.51% to 1,969.41 at the close in New York, extending earlier gains after diving 1.5% Friday. The DJIA rallied 390.30, or 2.42%, to 16,492.68. The NAS 100 advanced 2.73% to 4,811.93.
The volume was moderate on the NYSE at about 850-M/shares changing hands.
Stocks around the world climbed today, led by China.
A stock market rally in Shanghai in the final hour of trading followed a pattern that has recently suggested state intervention to prop up the nation’s stockss. US stocks have turned more volatile in recent weeks on concerns that a Chinese economic slowdown will weigh on global growth, while participants bet the US Fed is on course this year for its 1st interest-rate increase since Y 2006.
The S&P 500 swung up or down an average of 2% a day for more than 2 weeks through Friday.
The Chicago Board Options Exchange Volatility Index (VIX) has posted 11 straight sessions above 25, a level that before August it had touched on just 5 days since Y 2011. The measure of market turbulence known as the VIX fell 8.9% Tuesday to 25.32..
Participants remain confident the Fed will raise borrowing costs this year, even as they pare bets on policy makers deciding to do so at a meeting next week.
Traders are now pricing in a 30% chance the central bank will increase rates at this month’s gathering, down from 48% before China’s currency devaluation on 11 August. Odds of a move at the December meeting are at 60%.
These next 2 weeks are Key: the Chinese market has reopened, the FOMC next week, and may see some guidance from US companies. When it comes to the Chinese situation, it is important that either its is positive and think the government can handle the stock market situation and everything will come back to normal, or negative and think a downward spiral has just begun.
Stay tuned…
HeffX-LTN
Paul Ebeling
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