US stocks shot up four per cent or more yesterday as investors hungry for bargains overcame the recent wave of fear that has driven selling over the last two weeks.
The rally marked the second bounce in a yo-yo week. After a sell-off that has pushed the S&P 500 down as much as 17 per cent since 22 July, the market showed signs of regaining its footing.
“It’s a bungee cord market. We’ve fallen off of a small bridge, the bungee cord bounced us up, and oscillations will diminish, but we’re still bouncing around,” said Fred Dickson, chief market strategist at D.A. Davidson & Co.
Investors used results from Cisco and a slight dip in weekly US jobless claims as the catalyst to snap up beaten-down stocks.
The Dow Jones industrial average surged 423.37 points, or 3.95 per cent, to 11,143.31. The Standard & Poor’s 500 Index shot up 51.88 points, or 4.63 per cent, to 1,172.64. The Nasdaq jumped 111.63 points, or 4.69 per cent, at 2,492.68.