Global stock markets diverge, commodities fall as China jitters persist

Wed Aug 26, 2015 12:55pm EDT
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By Sinead Carew

NEW YORK (Reuters) - Wall Street advanced on Wednesday while European shares and commodities fell as investors balanced strong U.S. economic data and policy comments with fears about China's slowing economy.

The benchmark S&P 500 was up 0.7 percent in afternoon trading, off its earlier highs, 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 positive, erasing earlier losses, after Dudley's rate hike comments.

Europe's FTSEurofirst 300 index of major companies .FTEU3 fell 1.9 percent in a choppy trading day. China's key share indexes also ended down after attempts to move higher were slapped back by waves of selling several times, reflecting hopes for more government and central bank support.

The Shanghai Composite Index .SSEC ended down 1.3 percent, its fifth straight day in the red as Beijing also dished out another round of trading bans.

"Everybody's just on guard and aware of the potential for greater volatility than we've seen in quite a while. We've seen investors dip their toes and buy high-quality names they like that they can get cheaper," said Brian Fenske, head of sales trading at ITG in New York. He added, "You could call me two hours from now and we could be down."

At 12:35 p.m., the Dow Jones industrial average .DJI rose 122.43 points, or 0.78 percent, to 15,788.87, the S&P 500 .SPX gained 13.14 points, or 0.7 percent, to 1,880.75 and the Nasdaq Composite .IXIC added 29.44 points, or 0.65 percent, to 4,535.92.   Continued...

A man shelters under an umbrella as he walks past the London Stock Exchange in London, Britain August 24, 2015. REUTERS/Suzanne Plunkett