Wall Street opens sharply higher following goods data
U.S. stocks opened sharply higher on Wednesday, with all three major indexes up about 2 percent, after data showed durable goods orders rose more than expected in July.
Analysts had expected a fall of 4 percent. Orders for core capital goods, a proxy for business investment, rose 2.2 percent – the biggest gain in 13 months..
All 10 major S&P sectors were higher, led by the technology index’s .SPLRCT 3.4 percent gain.
Apple (AAPL.O) rose 4 percent to give the biggest boost to the S&P and the Nasdaq.
The strong start followed a dramatic day of trading on Tuesday, when the three main indexes reversed course suddenly to close sharply lower.
“These type of swings are typical when the market behaves in a way that is a real test of nerves and there is a lot of ongoing uncertainty,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
Adding to the positive tone on Wednesday, a European Central Bank official indicated that the ECB could provide further monetary support should falling commodity prices put the bank’s inflation target at increased risk.
The stronger durable goods data improved the case for a U.S. interest rate increase in September.
At 10:00 a.m. ET, the Dow Jones industrial average .DJI was up 313.24 points, or 2 percent, at 15,979.68, the S&P 500 .SPX was up 37.9 points, or 2.03 percent, at 1,905.51 and the Nasdaq Composite .IXIC was up 95.51 points, or 2.12 percent, at 4,602.00.
Up to Tuesday’s close, the Dow had lost 10.71 percent in the past six trading days, while the S&P 500 .SPX dropped 11.71 percent and the Nasdaq composite .IXIC 11.5 percent.
The S&P 500 rose as much as 2.9 percent on Tuesday before closing down 1.35 percent, while the Dow rose as much as 2.8 percent before closing down 1.29 percent. The Nasdaq rose as much as 3.6 percent before ending down 0.44 percent.
The Shanghai Composite Index .SSEC ended down for the fifth straight day, underscoring fragile confidence and deep doubt over whether the Chinese central bank’s cuts in interest rates and reserve ratios on Tuesday could stabilize the economy.
The dollar index .DXY, which touched a 7-month low earlier in the week, reversed course to be up 0.28 percent after the U.S. data. Treasury prices fell.
Google (GOOGL.O) shares were up 4.8 percent at $641.77 after Goldman Sachs raised its rating to “buy” from “neutral” and added it to its conviction buy list.
Cameron International (CAM.N) soared 45 percent to $61.77 after Schlumberger (SLB.N), the world’s No.1 oilfield services company, said it would buy the oilfield equipment maker in a $14.8 billion deal. Schlumberger fell 2 percent to $70.99.
Abercrombie & Fitch (ANF.N) jumped 13.2 percent to $19.55 after the teen apparel retailer reported better-than-expected quarterly sales.
Advancing issues outnumbered decliners on the NYSE by 2,209 to 628. On the Nasdaq, 1,873 issues rose and 684 fell.
The S&P 500 index showed no new 52-week highs and 11 new lows, while the Nasdaq recorded two new highs and 37 new lows.