NEW YORK: Wall Street was sharply higher on Wednesday while European shares and commodities prices fell as investors balanced strong U.S. economic data and interest rate comments with fears about China's slowing economy.
The benchmark S&P 500 was up 2.6 percent in afternoon trading, helped by stronger-than-expected data on durable goods orders and comments that appeared to make a September interest rate hike less likely.
New York Fed President William Dudley said a rate hike next month seems less appropriate given the threat posed to the U.S. economy by recent global market turmoil.
Most U.S. Treasuries prices turned broadly lower in the late afternoon, erasing earlier gains.
The stock market remained choppy even though investors viewed the hint of caution about rate hikes as reassuring amid slowing China growth and after its recent currency devaluation.
"It's not surprising given the sudden change in valuations that we're going to have difficulty finding a consistent level in pricing," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco. "It's very easy to start a stampede in one direction or the other. All that I can predict is that volatility will stay elevated for at least a few more days."
Massocca said the period of volatility could potentially come to an end soon because the market will have had time to digest China's Aug. 11 currency devaluation.
The CBOE Market Volatility Index was still elevated at 31, indicating significant uncertainty, although the "fear index" was well below Monday's 6-1/2 year peak of 53.3.
The Dow Jones industrial average rose 418.7 points, or 2.67 percent, to 16,085.14, the S&P 500 gained 48.77 points, or 2.61 percent, to 1,916.38 and the Nasdaq Composite added 125.05 points, or 2.77 percent, to 4,631.54.
Europe's FTSEurofirst 300 index of major companies closed down 1.9 percent in a choppy trading day. China's key share indexes also ended lower after attempts to move higher were slapped back by waves of selling, reflecting hopes for more government and central bank support.
The Shanghai Composite Index ended down 1.3 percent, its fifth straight day in the red
The dollar index, which measures the greenback against a basket of major currencies, pared its gains after the Dudley comments but was up 0.6 percent in afternoon trading.
Despite China's struggles, Asia markets had some bright spots. Japan's Nikkei saw a 3.2 percent jump and Korea's KOSPI showed its biggest jump in two years with a 2.6 percent increase.
Oil prices were hurt by a bigger-than-expected increase in U.S. gasoline stocks, compounding negative sentiment from worldwide equities that pushed fuel prices to 6-1/2-year lows.
U.S. crude settled down 1.8 percent at $38.60 a barrel while Brent crude futures were last down 0.3 percent at $43.07.
Copper, often considered a proxy for Chinese and global economic activity, was down 2.9 percent while prices of gold, traditionally a safe-haven asset, were off 1.2 percent.
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