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Tuesday, July 28, 2015

Wall Street ends sharply higher as China jitters ebb

US stocks ended sharply higher today, breaking a five-day losing streak as attention shifted from trouble in Chinese equities to US corporate earnings and to speculation the first Federal Reserve interest rate hike may not come until December.

The Dow Jones industrial average and S&P 500 chalked up gains of more than 1 percent, while the Nasdaq Composite lagged slightly.

After the S&P sank over the past week toward the low end of a range it has traded in since February, some investors wagered the market was primed for a technical bounce-back.

The Dow Jones industrial average rose 1.09 percent, to end the session at 17,630.27. The S&P 500 gained 1.24 percent to 2,093.25 and the Nasdaq Composite added 0.98 percent to finish at 5,089.21.

All the 10 major S&P 500 sectors rose, with the energy index leaping 2.99 percent as oil prices recovered from near six-month lows.

US consumer confidence weakened in July to its lowest level since September, due in part to a less optimistic outlook on the labor market.

Ongoing uncertainty related to China's stock market, which closed lower again today, took a backseat to US corporate earnings.

With second-quarter reports well under way, analysts now expect overall earnings of S&P 500 companies to edge up 0.3 percent and revenue to decline 4.0 percent, according to Thomson Reuters data.

European shares rebounded, lifted by strong company results and corporate takeover activity after falling in the previous five sessions due to concerns over China's growth.

The pan-European FTSEurofirst 300 index closed up 1.1 percent at 1,545.79 points. The index had tumbled in the last five sessions and touched a two-week low on Monday.

The euro zone's blue-chip Euro STOXX 50 index rose 1.2 percent. Both the FTSEurofirst and the Euro STOXX are up around 13 percent so far in 2015.

The STOXX Europe 600 Insurance Index advanced 1.2 percent, buoyed by Zurich Insurance's possible bid for rival RSA, which caused RSA to surge 18 percent in its biggest one-day percentage gain since 1992.

Other deals saw Melrose Industries jump 9.6 percent after agreeing to sell its Elster business to Honeywell, while engineering group GKN gained 7.3 percent after moving to buy Fokker Technologies.

Kering climbed 5.6 percent after Gucci, the flagship brand of the French luxury group, posted a rise in underlying second-quarter sales.

However, Michelin fell 6.1 percent after warning price cuts were taking a bigger-than-expected toll on its earnings.

In Asia, MSCI's broadest index of Asia-Pacific shares outside Japan ended the day 0.2 percent higher after falling nearly 1 percent early on, touching its lowest level since July 9.

Tokyo's Nikkei ended 0.1 percent lower.

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Tags:  US  stock market  Europe  Nikkei  China  decline  





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