Stocks opened sharply higher on Wednesday after data showed U.S. orders for durable goods rose more than expected in July.
The Dow Jones industrial average was up 393.31 points, or 2.51%, in the first 15 minutes of trading. The broader S&P 500 index and the tech-focused Nasdaq composite also rallied.
The early move higher comes a day after a rally on Wall Street fizzled as concerns about China’s economy overwhelmed a bout of bargain hunting.
Wednesday’s stronger data improved the case for a U.S. interest rate increase in September. Investors will get further clues on a rate hike when Federal Reserve Bank of New York President William Dudley speaks on the regional economy later in the day.
Adding to the positive tone, a European Central Bank official indicated that the ECB could provide further monetary support should falling commodity prices put the bank’s inflation target at increased risk.
U.S. stock indexes have swung wildly in recent days. Up to Tuesday’s close, the Dow had lost 10.71% in the past six trading days, while the S&P 500 dropped 11.71% and the Nasdaq composite 11.5%.
“These type of swings are typical when the market behaves in a way that is a real test of nerves and there is a lot of ongoing uncertainty,” said Peter Cardillo, chief market economist at Rockwell Global Capital in New York.
The Shanghai Composite Index ended down for the fifth straight day, underscoring fragile confidence and deep doubt over whether the Chinese central bank’s cuts in interest rates and reserve ratios on Tuesday could stabilize the economy.
Oil prices were little changed around 6-1/2-year lows, with U.S. crude still below $40 per barrel.
Google’s (GOOG) shares were up after Goldman Sachs raised its rating to “buy” from “neutral” and added it to its conviction buy list.
Cameron International (CAM) soared after Schlumberger, the world’s No.1 oilfield services company, said it would buy the oilfield equipment maker in a deal valued at $14.8 billion.