US stocks jump after Chinese market surges, US economy grew faster than

Following a six-year run-up in U.S. stocks that has pushed major indexes to all-time highs, investors worry the economy could falter if the Fed raises rates too soon, chocking economic growth.

The three indexes have closed lower five days in a row, with the Dow falling almost 1,700 points in that time.

CONSUMER SPENDING: The Commerce Department said U.S. consumers increased their spending 0.3 percent in July, as wages and salaries made their biggest jump in eight months.

US stocks rebounded in afternoon trading Wednesday after slumping for six straight days on concern that growth in China was slowing more quickly than previously thought.

The Dow Jones industrial average climbed 619 points, or 4 percent on Wednesday. The Standard & Poor’s 500 index gained 48 points, or 2.5 percent, to 1,989. The Nasdaq composite gained 191 points, or 4.2 per cent, to 4,697.

Asian markets rebounded Thursday with the help of central bankers around the globe and encouraging signs from China, where volatility in stocks dropped off significantly from previous sessions.

“Looking ahead, we … suspect that investors will be less anxious about China in due course, as it becomes apparent that her economy is not collapsing”, they wrote in a note to investors. William Dudley, president of the Federal Reserve Bank of New York, told reporters that recent turmoil in global markets makes the idea of raising rates next month less compelling. The Fed isn’t expected to deliver a policy update until it wraps up a meeting of policymakers in mid-September.

ICAHN EFFECT: Freeport-McMoRan rose 2 percent on news that activist investor Carl Icahn took an 8.5-percent stake in the mining company as it cuts costs due to declining copper prices.

Oil soared to its biggest one-day gain since March 2009. The stock added 24 cents to $10.43. The sector fell 0.6 percent.

December gold retreated $2 to US$1,122.60 an ounce.

U.S. stocks continued to recover somewhat Wednesday following the sharp sell-off earlier this week.

The buoyant start in the US recalled Tuesday’s confident open, which evaporated in the last hour, pushing the SP 500 down 1.35 per cent.

China’s Shanghai Composite Index on Thursday rose 2.2% to reclaim the critical 3,000 mark.

European markets also advanced, while oil led broad gains in commodities. The corporate service price index rose 0.6 percent year-over-year following a 0.4 percent increase in June. The contract fell 71 cents on Wednesday to close at 38.60 dollars. The euro climbed to $1.1234 from $1.1242.