NEW YORK (REUTERS) - US stocks rose more than 2 per cent on Tuesday (Sept 8), bouncing after steep losses last week and a China-fuelled rebound in global equities.
Gains were broad-based and followed a three-day US holiday weekend. All but one of the 10 major S&P sectors - energy - ended with gains of more than 2 per cent.
Hopes for more stimulus measures from the Chinese government increased after data on Tuesday showed that China's imports shrank far more than expected in August, falling for the 10th straight month.
Chinese stocks surged in a late rally, sparking a rebound in global equities. Late on Monday, China said it would remove a tax on dividend incomes for investors who hold stocks for more than a year in an effort to encourage longer-term investment.
"We had some nice buying opportunities with the sell-off in August, and I think people are starting to take advantage of that and put money to work," said Mr Larry Peruzzi, senior equity trader at Cabrera Capital Markets. "In China it seems like there is a willingness to continue with stimulus, so hopefully those markets will stabilise."
The Dow Jones industrial average rose 390.3 points, or 2.42 per cent, to 16,492.68, the S&P 500 gained 48.19 points, or 2.51 per cent, to 1,969.41 and the Nasdaq Composite added 128.01 points, or 2.73 per cent, to 4,811.93.
All three major US stock indexes posted losses of at least 3 per cent for last week.
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.
A mixed report on the US jobs market for August on Friday added to investor uncertainty over whether the Federal Reserve will increase interest rates at its Sept 16-17 meeting.
Apple shares gave the biggest boost to the S&P and the Nasdaq, rising 2.8 per cent to US$112.31, a day before the iPhone maker is expected to unveil new offerings.
After the bell, Yahoo shares were down 3.1 per cent at US$29.95 after it said it was considering its options following an Internal Revenue Service denial of its request on a tax ruling related to Yahoo's plans to exit a stake in Alibaba Group Holding.