Street shares jumped almost two per cent yesterday in the latest volatile session as investors weighed the impact of a stumbling Chinese economy and global market turmoil on the Federal Reserve’s impending decision about when to raise interest rates.
The Dow Jones industrial average jumped 1.82 per cent to end at 16,351.31 points.The S&P 500 climbed 1.83 per cent to 1,948.85 and the Nasdaq Composite surged 2.46 percent to 4,749.98.
The CBOE Volatility index, Wall Street’s “fear gauge”, dipped 11 per cent but stayed in territory not seen since 2011 after Standard & Poor’s cut its credit rating on the United States for the first time.
US investors have weathered over two weeks of unusually wide-swinging trade that has left the S&P 500 with its worst monthly drop in three years and a loss of 8.5 per cent from an all-time high in May.
“What we’re seeing today is not a recovery. It’s market volatility, it’s nervousness, it’s an inability to call the direction of the market,” said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.
“Through now and October we’re going to see a lot more of this, a lot of volatility.”
Shares of banks and bond insurers rose after Puerto Rico’s indebted public utility Prepa reached a deal with a key bondholder group.
OFG Bancorp surged 19.59 per cent and First Bancorp rose 9.81 per cent.