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29 March 2024

US stocks rebound after Monday's rout

Traders crowd around a post on the floor of the New York Stock Exchange at the opening bell. US stocks surged more than one percent on opening Tuesday following Monday's plunge, but within minutes the gains fell off on profit-taking. The Dow Jones Industrial Average added 9.99 points (0.09 percent) to 10,819.84 in the first 15 minutes of trade. The broader S&P 500 rose 2.28 (0.20 percent) 1,121.74, while the tech-heavy Nasdaq Composite picked up 8.11 points (0.34 percent) to 2,365.80. The slight rebound came after Monday's rout, the biggest plunge since the financial crisis of 2008. (AFP)

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By AFP

US stocks rebounded strongly in early trade Tuesday, surging well over one per cent one day after their steepest plunge since the 2008 financial crisis.

The Dow Jones Industrial Average added more than two per cent in early trade before falling back slightly, while the Nasdaq's early gain topped 2.6 per cent.

At 1415 GMT the Dow was up 183.99 points (1.70 per cent) to 10,993.84.

The broader S&P 500 rose 24.43 (2.18 per cent) to 1,143.89, while the tech-heavy Nasdaq Composite picked up 60.57 points (2.57 per cent) to 2,418.26.

The slight rebound came after Monday's rout, the biggest plunge since the financial crisis of 2008, driven by the news that Standard & Poor's had downgraded the US credit rating as well as worries about a new recession.

The Dow lost 5.6 per cent, the S&P 500 6.7 per cent, and the Nasdaq 6.9 per cent.

Traders were looking ahead for inspiration from the Federal Reserve's policy-setting committee, which was meeting Tuesday morning to discuss what can be done to boost the sagging economy.

"This positive price action comes ahead of the Federal Open Market Committee's latest decision on monetary policy," said Sarah Wasserman of Schaeffer's Investment Research.

"While the Fed's been noncommittal about additional monetary easing, Friday's downgrade has spurred hopes that additional assistance from the government could, perhaps, be on the horizon."

Bank of America jumped 6.1 per cent, rebounding from its 20.3 per cent plunge on Monday spurred by AIG's ê10.5 billion lawsuit against the bank over losses incurred on mortgage-backed securities sold by a Bank of America unit.

Citigroup, another big Monday loser, was up 10.9 per cent.

Bond prices were slightly lower. The yield on the 10-year Treasury rose to 2.38 per cent from 2.34 per cent late Monday, while that on the 30-year Treaury rose to 3.69 per cent from 3.66 per cent. Bond prices and yields move in opposite directions.