Wall St. up as chances of Sept rate hike recede

By Tanya Agrawal and Sweta Singh

(Reuters) - U.S. stocks were up almost 2 percent in choppy afternoon trading on Wednesday after a top Federal Reserve official said global market turmoil made the case for a September interest rate hike was "less compelling".

New York Fed President William Dudley's remarks were the clearest indication yet that market ructions caused by fears of an economic slowdown in China could affect U.S. monetary policy.

All 10 major S&P 500 sectors were up, led by the technology index's <.SPLRCT> 2.64 percent gain, raising hopes that Wall Street could snap its six-day losing streak.

Wednesday's gains followed a dramatic selloff on Tuesday, when the three main indexes reversed course suddenly in late trading to close sharply lower.

 

"I think today's early rally is because nothing particularly bad happened overnight and while everyone is looking at China very nervously, today's data showed that the U.S. is growing," said Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh.

Data earlier on Wednesday appeared to strengthen the case for a rise in interest rates next month.

Durable goods orders rose 2 percent in July, compared with analysts' average forecast of a 4 percent fall. Orders for core capital goods, a proxy for business investment, rose 2.2 percent - the biggest gain in 13 months.

At 14:24 p.m. ET (1824 GMT), the Dow Jones industrial average <.DJI> was up 285.07 points, or 1.82 percent, at 15,951.51, the S&P 500 <.SPX> was up 32.75 points, or 1.75 percent, at 1,900.36 and the Nasdaq Composite <.IXIC> was up 83.95 points, or 1.86 percent, at 4,590.44.

Apple provided the biggest boost to the S&P 500 and Nasdaq composite index, rising 2.95 percent to $106.81.

Up to Tuesday's close, the Dow had lost 10.71 percent in the past six trading days, while the S&P 500 <.SPX> dropped 11.71 percent and the Nasdaq composite <.IXIC> 11.5 percent.

The Shanghai Composite Index <.SSEC> ended down for the fifth straight day, underscoring fragile confidence and deep doubt over whether the Chinese central bank's cuts in interest rates and reserve ratios on Tuesday could stabilize the economy.

Google was up 4.6 percent at $640.70 after Goldman Sachs raised its rating to "buy" from "neutral" and added it to its conviction buy list.

Cameron International soared 40.6 percent to $59.70 after Schlumberger , the world's No.1 oilfield services company, said it would buy the oilfield equipment maker in a $14.8 billion deal. Schlumberger fell 5.1 percent to $68.80.

Abercrombie & Fitch jumped 6.8 percent to $18.45 after the teen apparel retailer reported better-than-expected quarterly sales.

Advancing issues outnumbered decliners on the NYSE by 2,028 to 1,038. On the Nasdaq, 1,798 issues rose and 1,006 fell.

The S&P 500 index showed no new 52-week highs and 28 new lows, while the Nasdaq recorded five new highs and 133 new lows.

(Editing by Saumyadeb Chakrabarty)