Wall Street roars back with 619-point gain

Wall Street started strong Wednesday and this time didn’t falter at the finish line, with the blue chip Dow Jones industrial average reversing six days of losses with a gain of 619 points, or 3.95 percent, to finish at 16,285. The daily increase was the third-biggest point rally in the market’s history.

The broader S&P 500 and the Nasdaq indexes were up strongly as well, registering gains of 3.9 percent and 4.24 percent respectively.

The Dow had fallen about 1,900 points over little more than a week, while the slump wiped out — on paper — more than $2 trillion in corporate value.

The rally could ease fears of a sustained global downturn after heavy losses in the Chinese stock market spooked equity markets around the world. China’s troubles were having an immediate — and negative — impact on emerging markets, many of which have come to depend on Beijing as the biggest single buyer of commodities and raw materials.

U.S. and world markets also had been battered in recent days by falling oil and commodity prices and concerns about a looming interest rate hike from the Federal Reserve. The U.S. markets staged a similar 440-point rally Tuesday morning, but a late round of selling pushed the Dow into negative territory.

On Wednesday, the markets opened with a big gain, fell back slightly at midday, but rebounded smartly in the final hour of trading.

“A lot of people lay back to see if we were going to have another final-hour meltdown, but we had a very good closing here,” Art Cashin, director of floor operations for banking giant UBS, told CNBC. He said the market was poised to build on the gains Thursday, provided there would not be another “overnight shock” from China.

Investors appeared heartened by moves by Chinese officials to cut interest rates in the face of slowing overall growth, and by remarks Wednesday from William Dudley, head of the influential Federal Reserve Bank of New York, hinting that a rise in U.S. interest rates may not be imminent.

Many analysts were expecting the Fed to boost rates at its next policy meeting in September, but Mr. Dudley told reporters in a briefing that he was having second thoughts given the market’s recent gyrations, a sharp drop in oil prices and the recent bad news from Asia. The Fed has not raised rates from their near-zero level since the onset of the global financial crisis in late 2007, even as the U.S. economy has gradually strengthened.

“At this moment, the decision to begin the normalization process [in September] seems less compelling to me than it was a few weeks ago,” Mr. Dudley said, “but normalization could become more compelling by the time of the meeting as we get additional information on how the U.S. economy is performing and more information on international and financial market developments.”

By the end of the day, the Dow Jones industrial average rose 619.07 points, or 3.95 percent, to 16,285.51, the S&P 500 gained 72.9 points, or 3.9 percent, to 1,940.51 and the Nasdaq composite added 191.05 points, or 4.24 percent, to 4,697.54.

The Dow and the S&P posted their biggest daily gains since November 2011, and the tech-heavy Nasdaq registered its biggest one-day jump since August that year.

Markets around the world offered a more mixed picture of whether the steep drops of recent days had been halted.

Major indexes in Germany, France and Britain fell from 1.3 to 1.7 percent Wednesday. Markets in Asia were mixed. Japan’s Nikkei 225 stock index rose 3.2 percent. Hong Kong’s Hang Seng index fell 0.5 percent.

The price of oil fell back below $39 a barrel after a U.S. government report showed an unexpected decline in demand for gasoline. U.S. government bond prices fell, and the yield on the 10-year Treasury note rose to 2.18 percent.

Chinese officials have announced a set of measures this week to boost growth rates and stabilized its domestic stock markets, which soared in the first half of the year as smaller investors jumped into the market.

⦁ This article is based in part on wire service reports.