Allstate Journal

Stocks rebound after big losses; China jumps 6%

After a big down day yesterday following a bloodbath in Chinese stock markets and an outage on the New York Stock Exchange, stocks rebounded Thursday as the Dow jumped about 100 points. The jump comes after Wednesday’s 261-point drop to 17,515.42, brought the blue-chip index to its lowest level since early February. Stocks staged a strong rally early but pared gains in afternoon trading. The Dow Jones industrial average was up 90 points, or 0.5%, after being up more than 200 points earlier.AP WALL STREET F USA NY

The Standard & Poor’s 500 index gained 0.6% and the tech-heavy Nasdaq composite index added 0.7%. After cratering nearly 6% Wednesday, the Shanghai composite index in mainland China rallied back 5.8% Thursday. The bounce was helped by the government’s move to ban state-owned enterprises and major stakeholders (those with 5%-plus stakes) from selling shares for six months. That reduced some of the selling pressure and raised hopes that Chinese authorities could stem the huge downdraft in Chinese shares, which has knocked the index down by a third and wiped out more than $3 trillion in market value since the June 12 peak.

Other Asian markets also rose: Hong Kong’s Hang Seng gained 3.7% and Japan’s Nikkei index rose 0.6%. The Athens government has until midnight tonight Greece time to submit its latest set of reforms to its eurozone creditors, with hopes of snaring a deal by the Sunday deadline set by European leaders. Optimism for a deal is again on the rise, witnessed by solid gains in Europe stock exchanges. Germany’s DAX jumped 2.3% and France’s CAC 40 added 2.6%. Britain’s FTSE 100 was up 1.4%. After the closing bell last night, aluminum maker Aloca (AA) reported earnings that fell shy of estimates but it topped revenue expectation.

And before the opening bell, snack maker and soft-drink giant Pepsico (PEP) topped both earnings and sales forecasts, and also raised its outlook for the rest of the year. Add to that the fact that the New York Stock Exchange, which was able to close the market smoothly last night after a 3.5 hour outage Wednesday due to tech problems, opened without any hitches this morning. The yield on the 10-year Treasury note bounced back up, rising to 2.30% from 2.20%.

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