U.S. stocks rallied following the Labor Day weekend and taking its cues from the behavior of the Chinese stock market. The S&P 500 closed up 48 points to 1,969, while the Dow Jones Index closed 390 points higher to 16,492 and the Nasdaq ended up 128 points to 4,811.
The Chinese government stepped in at the last hour of trading in Asia to buy stocks and push their market to close higher. Europe followed through and also ended higher as euro zone second quarter GDP growth has been revised up to 0.4 percent on increases in household consumption and exports.
IHS Global Insight chief European and U.K. economist Howard Archer believed the upwardly revised gross domestic product data for the euro zone was good news. “We believe that the conditions for a modest cyclical euro zone upturn remain largely in place and it should be able to achieve ongoing reasonable, if far from unspectacular growth, over the coming months,” he said.
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The U.S. buying frenzy was sparked by the opinion that China would spend whatever it takes to keep its economy going.
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