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Wall St rebounds, up 1pc after China moves on yuan

NEW YORK: US stocks jumped more than 1 percent on Tuesday, bouncing back from a sharp sell-off the previous day as C

Aug 06 2019

NEW YORK: US stocks jumped more than 1 percent on Tuesday, bouncing back from a sharp sell-off the previous day as China stepped in to stabilize the yuan, easing concerns that currencies would be the latest weapon in the trade war.

China's overnight intervention came after the US Treasury Department labeled Beijing as a currency manipulator as it let the yuan slide to a more than decade low on Monday.

"It's a signal from the Chinese side that they want to keep the yuan steady and elevated. But it also indicates how quickly things can change. That's permeating the tone in the market, and it's one of the reasons there remains that sense of trepidation," said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.

On Monday, US stocks suffered their sharpest one-day percentage drop of the year after a steep fall in the Chinese currency, with the S&P 500 and Nasdaq losing at least 3% each in the session.

China's move to fix the yuan at a slightly stronger rate and White House economic adviser Larry Kudlow's comment that President Donald Trump was planning to host a Chinese delegation for further talks in September allayed fears of a further escalation in the trade war.

The technology sector, which includes companies that have a big exposure to China and were at the heart of Monday's sell-off, provided the biggest boost to the S&P index, rising 1.52%.

The Dow Jones Industrial Average rose 248.89 points, or 0.97%, to 25,966.63, the S&P 500 gained 31.23 points, or 1.10%, to 2,875.97 and the Nasdaq Composite added 100.77 points, or 1.3%, to 7,826.81.

The S&P 500 had been reeling from last week's shock when Trump vowed to slap a 10% tariff on a further $300 billion in imports from China.

Apple Inc gained 1.7% after three days of heavy losses, while the Philadelphia Semiconductor index edged 1.34% higher.

Among other stocks, Take-Two Interactive Software Inc jumped 8.8% after the videogame publisher raised its full-year revenue forecast.

Advancing issues outnumbered declining ones on the NYSE by a 1.87-to-1 ratio; on Nasdaq, a 1.53-to-1 ratio favored advancers.

The S&P 500 posted five new 52-week highs and 24 new lows; the Nasdaq Composite recorded 20 new highs and 189 new lows.

Copyright Reuters, 2019