NEW YORK — A decline in the dollar helped fuel a market rebound Wednesday that nearly erased a big sell-off the day before brought on by fears of a slowdown in China.
Stocks had fallen more than 1 percent Tuesday after a surprise interest-rate increase in China, the first time the country had raised rates in nearly three years. That spurred concern among some traders that slower growth in China might put a drag on the global economy.
Some of those concerns were erased after the Shanghai Composite Index, China’s main stock-market benchmark, rose slightly in overnight trading. Those gains “helped create a more constructive tone” for trading Wednesday, said Nick Kalivas, an equity analyst for MF Global.
The fact that China raised interest rates without leading to a drop in stock prices “was a sign of strength,” said Sandy Mehta, the chief investment manager for Value Investment Principals, based in Hong Kong. “Raising rates shows that they have confidence in their economy and it continues to grow strongly.”
After the bell, Netflix and eBay reported stronger-than- expected revenues. Shares of both companies were up more than 6 percent in after-market trading. The strong results could help shift sentiment in favor of technology companies, which took a beating Tuesday after earnings from Apple and IBM didn’t live up to investors’ expectations.
Every segment within the Standard and Poor’s 500 index rose, led by a 1.9 percent jump in S&P’s index of materials companies — a group that includes aluminum maker Alcoa and International Paper.
The dollar fell 1.2 percent against a broad basket of currencies as demand for safe investments eased.
The Dow Jones industrial average rose 129.35, or 1.2 percent, to 11,107.97. The broader S&P 500 was up 12.27, or 1.1 percent, to 1,178.17, and the technology-focused Nasdaq composite index was up 20.44, or 0.8 percent, to 2,457.39.
