Stocks rally a second day, pulling further from deep losses of past week
Trader Kevin Walsh works the floor of the New York Stock Exchange on Aug. 26.
The U.S. stock market took another roller-coaster ride Thursday before ending with a sharp gain that lifted the Dow Jones industrial average by 369 points.
A report of unexpectedly robust U.S. economic growth in the second quarter and a surge in Chinese stock prices earlier Thursday, helped lifted the U.S. market.
The 2.3% gain in the Dow index came a day after it had soared 619 points, a 4% jump that followed a weeklong rout in share prices.
The blue-chip average gained as much as 381 points early Thursday, lost nearly all of the advance in late afternoon trading and then rallied back in the final hour as volatility pervaded trading.
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The Standard & Poor’s 500 index rose about 2.4% and the Nasdaq composite index gained nearly 2.5%.
Crude-oil prices soared to their biggest one-day gain since 2008 and, in turn, lifted energy stocks amid reports of heavy buying by short sellers who earlier had placed bets that prices would keep dropping.
Light crude oil for near-term delivery, which had been trading around six-year lows, jumped $3.96 to $42.56 a barrel on the New York Mercantile Exchange.
The short sellers were forced to cover as oil prices drew strength from the second-quarter U.S. economic report, along with a report in the Wall Street Journal that Venezuela contacted other OPEC nations for an emergency meeting aimed at propping up global prices.
Stocks are rebounding from a severe drop that mainly stemmed from worries about China’s economy and a plunge in its stock market.
But on Thursday, the Chinese market rallied, with the benchmark Shanghai composite index gaining 5.3%.
Stocks also rose in other major global financial markets, with key indexes showing gains of 1% to 3% in Japan, Germany and France.
Then the Commerce Department reported that the U.S. economy expanded at an annual rate of 3.7% in the second quarter, much more than the 2.3% increase originally estimated. It was the economy’s strongest growth since last summer.
Twitter: @PeltzLATimes
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