Tech stock leads Wall Street higher as China fears ebb

By Tanya Agrawal

REUTERS - U.S. stocks rose more than 1 percent to near session highs on Wednesday afternoon as technology stocks led a rebound from Tuesday's steep losses and as China's move to again support its financial markets eased investor concerns.

Nine of the 10 major S&P sectors were higher and half of them were up more than 1 percent. The technology index's 1.89 percent rise led the advancers. Apple and Microsoft were up about 3 percent and gave the biggest boost to the S&P 500 and the Nasdaq.

However, Netflix fell 3.4 percent after Citron Research recommended a short call on the stock.

The airlines index rose 2.9 percent, on track for its best day in a week, as oil prices remained pressured. Delta was up 3.5 percent and American Airlines up 4 percent.

The S&P energy index had a seesaw session as oil prices oscillated. The index was up 0.67 percent, near a session high, in afternoon trading. Chevron was down 0.2 percent, the only Dow component in the red.

The utilities index fell 0.2 percent as U.S. Treasuries yields rose after China's latest efforts to steady its markets reduced demand for safe-haven government debt.

Chinese stocks moved off steep losses to end almost flat on Wednesday after Chinese brokerages stepped up to buy shares, answering government calls to support the stock market and helping calm jittery investors.

At 13:21 ET (1721 GMT) the Dow Jones industrial average was up 215.83 points, or 1.34 percent, at 16,274.18. The S&P 500 was up 22.44 points, or 1.17 percent, at 1,936.29 and the Nasdaq composite was up 68.87 points, or 1.49 percent, at 4,704.97.

Wall Street closed sharply lower on Tuesday, with renewed concerns about China's economy pushing major indexes down almost 3 percent and intensifying fears of a long-term selloff.

In economic data, an ADP report showed U.S. private employers maintained a solid pace of hiring in August.

The report comes ahead of Friday's more comprehensive non-farm payrolls data, the last monthly employment report before the U.S. Federal Reserve meets on Sept. 16-17, when an announcement on interest rates is widely expected.

"I think there is still a 50-50 chance of a September rate hike because the employment situation continues to be strong but on the other hand inflation and volatility remains a concern," said Art Hogan, chief market strategist at Wunderlich Securities.

"In some ways, I think the market would like to see a rate hike out of the way so that they know it's behind them for the time being."

In corporate news, shares of banks and bond insurers rose after Puerto Rico's indebted public utility PREPA reached a deal with a key bondholder group.

OFG Bancorp surged 23.2 percent, First Bancorp rose 11.1 percent and MBIA Inc 14 percent.

Ambarella slid 12.6 percent after the chipmaker's third-quarter revenue forecast largely fell short of estimates.

GoPro, Ambarella's key customer, fell 7.4 percent to $40.45. Raymond James said Ambarella's forecast likely means GoPro will not launch more products this year.

Navistar fell 6.6 percent to $16.21 after the engine maker said it could face regulatory enforcement action for its disclosure practices and posted its 12th quarterly loss in a row.

Advancing issues outnumbered decliners on the NYSE by 2,040 to 977. On the Nasdaq, 1,851 issues rose and 900 fell.

The S&P 500 index showed only one new 52-week high and 10 new lows. The Nasdaq recorded 16 new highs and 39 new lows.

(Reporting by Tanya Agrawal in Bengaluru; Editing by Savio D'Souza)