US stocks surge for 2nd straight day; S&P 500 up 2.43 per cent

Traders work on the floor of the New York Stock Exchange.
Traders work on the floor of the New York Stock Exchange.AFP

NEW YORK (AFP) - US stocks posted big gains for the second straight session on Thursday as strong American economic data extended a global rally that began with a surge in beaten-down Chinese equities.

The Dow Jones Industrial Average rose 369.26 points (2.27 per cent) to 16,654.77.

The broad-based S&P 500 jumped 47.15 (2.43 per cent) to 1,987.66, while the tech-rich Nasdaq Composite Index advanced 115.17 (2.45 per cent) to 4,812.71.

The Commerce Department reported that the US economy grew at an annual rate of 3.7 per cent in the second quarter, much higher than the 2.3 per cent initially estimated.

The US growth report added to positive momentum from a 5.34 per cent rise in the Shanghai stock exchange, ending the worst five-day rout for almost two decades, and solid gains in European bourses.

Stocks were positive all day, but lost most of their gains during a bumpy mid-afternoon stretch before regaining their footing.

"We have returned to a period where volatility has grown," said David Levy, portfolio manager at Kenjol Capital Management.

"We've seen very intense swings."

Some investors were growing more confident after the US market held two straight days of gains.

"We went through a rocky week or two," said David Kotok, chief investment officer at Cumberland Advisors.

"I think we're heading higher."

All 30 members of the Dow rose, with especially large gains in Chevron (+6.2 per cent), General Electric (+4.2 per cent) and Nike (+3.6 per cent).

Other petroleum-linked stocks surged after oil prices climbed more than 10 per cent, rebounding from deep falls.

Drilling company Nabors Industries jumped 12.2 per cent, EOG Resources gained 6.8 per cent and ConocoPhillips added 5.7 per cent.

Technology stocks enjoyed big gains, including Netflix (+6.8 per cent), Tesla Motors (+8.1 per cent) and Apple and Facebook (both +2.9 per cent).

Metals and oil producer Freeport-McMoRan powered 28.7 per cent higher as it announced deep cuts to its capital budget in light of weak commodity prices.

Freeport now expects to spend US$4 billion (S$5.6 billion) in 2016, down 29 per cent from its estimate a month ago.

PVH, which owns the Tommy Hilfiger and Calvin Klein apparel brands, rose 6 per cent as it lifted its full-year profit forecast to US$6.90-US$7.00 per share, five cents above the prior range.

Bond prices were mixed. The yield on the 10-year US Treasury rose to 2.19 per cent from 2.18 per cent Wednesday, while the 30-year dropped to 2.93 per cent from 2.94 per cent. Bond prices and yields move inversely.