Stocks rally as economy gains - New York Report

US STOCKS rallied more than two per cent yesterday as strong US economic data and hints that a September interest-rate hike was unlikely fueled optimism that the worst of recent market turmoil was over.

The Dow Jones industrial average scored its biggest two-day percentage gain since 2008, while the S&P 500 and Nasdaq Composite racked up their biggest two-day increases since 2009.

“The worst is probably behind us but it's going to take a while before we get back to normal and we might still see some downward risk,” said Scott Brown, chief economist at Raymond James in St. Petersburg, Florida.

The Dow rose 2.27 per cent to 16,654.77 and the S&P 500 gained 2.43 per cent to 1,987.66. The Nasdaq Composite added 2.45 per cent to 4,812.71.

The economy grew 3.7 per cent in the second quarter – much faster than the previous estimate of 2.3 per cent.