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Montevideo, November 19th 2018 - 15:42 UTC

Wall Street rebounds 4%, but European markets still fearful of China

Thursday, August 27th 2015 - 04:28 UTC
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The Dow Jones closed up 3.97% at 16,285.64. Earlier, European stock markets lost ground again as fears persist of a China-led economic downturn. The Dow Jones closed up 3.97% at 16,285.64. Earlier, European stock markets lost ground again as fears persist of a China-led economic downturn.
US economy keeps steaming ahead: durable goods orders rose 2% in July while orders for core capital goods rose 2.2%, the biggest gain in 13 months. US economy keeps steaming ahead: durable goods orders rose 2% in July while orders for core capital goods rose 2.2%, the biggest gain in 13 months.

Shares on Wall Street finished with their biggest rise in four years ending another rocky day of trading on global markets. The mood was lifted by comments from US Federal Reserve official William Dudley that a rate rise in September seemed “less compelling”.

 The Dow Jones closed up 3.97% at 16,285.64. Earlier, European stock markets lost ground again as fears persist of a China-led economic downturn. London's FTSE 100 closed down by 1.7% , with markets in Paris and Frankfurt finishing down by 1.4% and 1.3% respectively.

Earlier on Wednesday, economic figures seemed to back the case for a rise in US interest rates at the Fed policy meeting on September 16-17. Durable goods orders rose 2% in July, compared with forecasts of a 4% fall. Orders for core capital goods rose 2.2%, the biggest gain in 13 months.

But analysts say there still likely to be more market volatility until the Federal Reserve meets next month.

On Tuesday, China's central bank cut its key lending rate by 0.25 percentage points to 4.6% in a bid to calm stock markets after the past days' turmoil. The dramatic losses and volatility in China have shattered investor confidence and led to sharp falls in Asia and the US over the past several sessions.

The interest rate cut was the fifth by the People's Bank of China since November last year. The move is aimed at boosting China's growth long-term, rather than having an immediate impact on investors.

Given China's central role in world trade, a slowdown in the world's second-largest economy would be likely to reverberate around the globe.

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