Wall Street can’t sustain rally, suffers new losses

A hoped-for rally fell apart in the final hour of trading as U.S. stocks posted another day of losses Tuesday.

The Dow Jones index of blue-chip stocks was up as much as 441 points — nearly 3 percent — after a strong morning surge, but investor interest was weak and the index finished the day down 204 points, or 1.29 percent, to finish at 15,666.

Analysts had been hoping for a turnaround from a string of major losses, including a stomach-churning 588-point loss Monday, after Chinese officials announce a new interest rate cut and other measures to stabilize its stock market and encourage new economic growth. Although the main Chinese stock market was down Tuesday, other markets across Asia and in Europe were strongly positive and Wall Street appeared set to follow suit.

The broader S&P 500 and the tech-heavy Nasdaq market finished with a loss after having been in positive territory for much of the day. The yield on 10-year Treasury bonds, a traditional safe haven in uncertain times, fell to a two-year low.

August was already on pace to be the worst month for Wall Street since the depths of the 2008 global financial panic, and traders said there was little sense that investors are ready to come back into the market in the short term.

“I thinks we need a bigger rebound than this to have any kind of conviction” that the pressure on global stocks is over, trader Matt Cheslock of Virtu Financial told CNBC.