Wall St follows world markets higher after holiday weekend

US stocks were higher in early afternoon trading on Tuesday as investors returned from a holiday weekend after a late rally by Chinese shares lifted global markets. Chinese stocks rose nearly 3 per cent on Tuesday as a surge in late-afternoon buying helped erase early losses. China said late on Monday it would remove tax on dividend incomes for investors who hold stocks for more than a year in an effort to encourage longer-term investment. Data on Tuesday showed that China’s imports shrank far more than expected in August, falling for the 10th straight month, bolstering hopes of more stimulus measures from the Chinese government.
Wall Street
At 12:37 ET, the Dow Jones industrial average was up 305.79 points, or 1.9 per cent, at 16,408.17, the S&P 500 was up 34.58 points, or 1.8 per cent, at 1,955.8 and the Nasdaq Composite was up 95.75 points, or 2.04 per cent, at 4,779.67. All the 10 major S&P sectors were higher with the industrials index's 2.2 per cent and technology 2.1 per cent rise leading the advancers. Apple shares were up 2.2 per cent at $111.69, a day before the iPhone maker is expected to unveil new offerings. The stock gave the biggest boost to the S&P and the Nasdaq.
Global financial markets have been rattled in recent weeks by fears that China's slowdown could drag on already sluggish global growth, prompting some investors to bet that the US central bank will delay a hike until the end of the year.
Wall Street capped a tough week on Friday, with major indexes closing down more than 1 percent, after a mixed August jobs report did little to quell uncertainty about whether the Federal Reserve will increase interest rates at its September16-17 meeting.
Following last Friday's employment data, futures market traders predicted about a 20 per cent chance a rate hike will come this month, down from around 30 per cent before the jobs report.
The Fed, which hasn't raised rates since 2006, has insisted it will hike long-term interest rates only when the recovery in the US economy is sustainable, placing special emphasis on the labor market and inflation. While the job market and unemployment rate has met Fed targets, inflation is stubbornly stuck below the central bank's 2 per cent target.
Federal Reserve Bank of Minneapolis President Narayana Kocherlakota is expected to speak at an event later in the day in Evanston, Illinois. Fitbit was up 8.5 per cent at $34.56 after Morgan Stanley upgraded the stock to "overweight".
Media General fell 1.7 per cent to $10.96 after it said it would buy diversified media company Meredith Corp for about $2.34 billion to create the third-largest local TV station owner in the United States. Meredith was up 9.3 per cent at $50.21.
Advancing issues outnumbered decliners on the NYSE by 2,458 to 516. On the Nasdaq, 2,227 issues rose and 564 fell. The S&P 500 index showed one new 52-week high and no new lows, while the Nasdaq recorded 38 new highs and 14 new lows, according to Reuters.
- biplab