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Stocks Rally on China Economy, Apple   10/21 17:05

   The U.S. stock market marched higher Tuesday, giving the Standard & Poor's 
500 index its best day of the year.

   NEW YORK (AP) -- The U.S. stock market marched higher Tuesday, giving the 
Standard & Poor's 500 index its best day of the year.

   Investors rallied behind an encouraging report on the Chinese economy as 
well as strong quarterly results from Apple and other big companies.

   The market continues on its recovery from last week's swoon and has now 
erased much of its losses over the last two weeks.

   "I think it's too early to call to call this a new rally, but I think there 
are definite signs that investors are gaining confidence again after last 
week's volatility," said Kristina Hooper, head of U.S. investment strategies at 
Allianz Global Investors.

   The Standard & Poor's 500 index added 37.27 points, or 2 percent, to 
1,941.28. The Dow Jones industrial average rose 215.14 points, or 1.3 percent, 
to 16,614.81. The Nasdaq composite rose 103.40 points, or 2.4 percent, to 
4,419.48.

   This week so far has been a contrast to last week's turbulence in many ways. 
Volatility is down, the S&P 500 index is on pace to have its best week of the 
year and the price of crude oil has stopped sliding. The bond market has also 
stabilized, with the 10-year Treasury note remaining around 2.20 percent for 
the last several days.

   "Last week the main thing driving the market was the decline in oil, the 
Ebola scare and the rally in the 10-year Treasury note. All of those items have 
stabilized," said Ian Winer, director of equity trading at Wedbush Securities.

   That said, there's still a chance for bumps ahead given that a meeting of 
the Federal Reserve is coming up next week where the central bank is expected 
to end its bond-buying economic stimulus program for good. Growth worries in 
Europe and China are still top of mind, and with U.S. corporate earnings season 
underway, the market's direction could change quickly, traders and strategists 
said.

   "Investors are likely to see more volatility, not less. We expected this to 
happen now that the Fed's quantitative easing program is ending," Hooper said. 
"We are in unusual times, so expect to see more of an outsized reaction in the 
market."

   Since falling to a six-month low last week, the stock market has now 
basically recovered nearly all of its losses. After closing at 1,862.49 on Oct. 
15, the S&P 500 index has rallied more than 4 percent in four days.

   One notable part of the market investors have been moving back into is 
smaller, riskier companies. While the S&P 500 and Dow are still down 1.6 
percent to 2.5 percent this month, respectively, the Russell 2000 is up 1 
percent for October.

   "That's an important sign that investors are regaining their confidence," 
Hooper said.

   Apple gave a boost to the overall market. The maker of iPhones and iPads 
rose $2.71, or 2.7 percent, to $102.47 after its quarterly results easily beat 
analysts' expectations. Apple said it earned $1.42 a share last quarter, helped 
by strong sales of the latest version of the iPhone.

   Investors also had an encouraging report out of Asia. China's economy 
expanded by 7.3 percent in the third quarter from a year earlier. Although 
growth slowed slightly from the previous quarter's 7.5 percent, analysts had 
expected a more marked slowdown, to 6.9 percent.

   China has been a worry spot for investors for many weeks, and has been a key 
reason why financial markets have been volatile lately. Signs of a slowdown in 
Europe have also been worrying investors.

   "After last week's volatility in the financial markets, the last thing 
investors needed was bad news out of China," said Neil MacKinnon, global macro 
strategist at VTB Capital.

   In commodities, oil prices were rising after weeks of declines. Crude gained 
as the better-than-expected economic data from China suggested higher global 
demand for oil. Benchmark U.S. crude rose 10 cents to close at $82.81 a barrel 
on the New York Mercantile Exchange. Brent crude, a benchmark for international 
oils used by many U.S. refineries, rose 82 cents to close at $86.22 on the ICE 
Futures exchange in London.

   In other energy futures trading on the NYMEX, wholesale gasoline rose 1.3 
cents to close at $2.213 a gallon, heating oil rose 2.7 cents to close at 
$2.513 a gallon and natural gas rose 4.1 cents to close at $3.711 per 1,000 
cubic feet.

   The recovery in oil prices helped send energy stocks higher. The energy 
sector in the S&P 500 jumped 2.9 percent Tuesday, by far the biggest gain of 
the 10 sectors in the index.

   In metals trading, gold rose $7 to $1,251.70 an ounce, silver rose 20 cents 
to $17.55 an ounce and copper rose four cents to $3.03 a pound.


(KA)


 
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