1. Business

U.S. stock markets close up sharply amid signs of global stability

U.S. stock markets surged Wednesday to finally snap a weeklong string of severe declines, with the Dow Jones Industrial Average soaring 619.07 points.

The blue-chip average finished with a gain of about 4 percent after suffering big drops in five consecutive sessions, mainly in response to economic woes in China.

It was the third-highest point gain in history for the Dow Jones industrials but, on a percentage basis, the gain was not even in the top 20, historically.

The broader Standard & Poor's 500 index gained 3.9 percent in closing at 1,940.05, and the Nasdaq composite index shot up 191.05 points, about 4.2 percent.

The Dow opened with a 443-point surge, pulled back and then rallied again to finish near its highs of the day, unlike its performance Tuesday, when stocks surrendered their entire early gains, and then some.

Traders said shares were helped in part by a Commerce Department report that showed U.S. orders for durable goods, such as cars and appliances, rose a higher-than-expected 2 percent in July after a 4.1 percent gain in June.

Stocks worldwide have tumbled in the past two weeks, in large part because of concern that China's giant economy — the world's second largest behind the U.S. — is much more sluggish than earlier thought.

The Dow index entered Wednesday's trading after having plunged 14.4 percent from its record high reached in mid May.

Over the past few days, ordinary Americans with 401(k)s and other investments have been calling their financial advisers in search of reassurance.

"I wouldn't say it is full-blown panic," said Brennan Miller, a branch manager for Charles Schwab in Chicago. "Markets have been steadily advancing for several years, and that breeds some complacency. This caught people off guard."

Any sign that the market has bottomed out could encourage investors to get back in.

"There's a lot of cash on the sidelines waiting to get in, so to the extent that there's any sort of bottom seen, that will increase people's confidence and boldness," said Erik Davidson, chief investment officer for Wells Fargo Private Bank.

Still, the market has a long way to go before it recovers its run of recent losses. The Dow remains down 8.6 percent this year, while the S&P 500 is off 5.8 percent. The Nasdaq is down just 0.8 percent.

Also weighing on the market is confusion about whether the Federal Reserve will raise its benchmark interest rate, currently near zero, at its meeting next month. The central bank had indicated a desire to start raising rates next month, but China and the stock market's turmoil have raised doubts about whether that will happen.

William Dudley, president of the Federal Reserve Bank of New York, told reporters Wednesday that "from my perspective at this moment" raising rates now "seems less compelling to me than it was a few weeks ago."

He quickly noted that that "could become more compelling by the time of the meeting as we get additional information on how the U.S. economy is performing."

U.S. economic reports this week "have actually been pretty positive," Dudley said. "Consumer confidence showed a good increase, new home sales were solid, the durable goods orders report was quite strong. But you also have to look at all the other things that potentially could affect the economic outlook."

That includes China and the markets' volatility. "International developments and financial market developments do have relevance because they can impinge and affect the economic outlook," Dudley said.