Wall St. opens higher on hopes of Chinese stimulus
U.S. stocks opened sharply higher on Tuesday after weak economic data out of China bolstered hopes of more stimulus measures from the Chinese government.
China’s imports shrank far more than expected in August, falling for the 10th straight month. Imports fell 13.8 percent from a year earlier, more than the 8.2 percent drop economists had expected.
However, Chinese stocks rose nearly 3 percent on Tuesday as a surge in late-afternoon buying helped erase early losses. Late on Monday, China said it would remove tax on dividend incomes for investors who hold stocks for more than a year in an effort to encourage longer-term investment.
“With volatility having receded somewhat during the past few days it appears that investors have been reassessing the potential negative fallout from the slowdown in China,” said Markus Huber, a senior analyst at Peregrine & Black.
At 9:46 a.m. ET the Dow Jones industrial average .DJI was up 306.56 points, or 1.9 percent, at 16,408.94, the S&P 500 .SPX was up 36.69 points, or 1.91 percent, at 1,957.91 and the Nasdaq Composite .IXIC was up 98.86 points, or 2.11 percent, at 4,782.78.
All the 10 major S&P sectors were higher with the technology index’s .SPLRCT 2.15 percent rise leading the advancers. Apple (AAPL.O) shares were up 2.3 percent at $111.82, a day before the iPhone maker is expected to unveil new offerings. The stock was the biggest boost on the S&P and the Nasdaq.
Global financial markets have been rattled in recent weeks by fears that China’s slowdown could drag on already sluggish global growth, prompting some investors to bet that the U.S. central bank will delay a hike until the end of the year. Read more