Stocks Skyrocket as Dow Regains More Than 600 Points

U.S. stocks emphatically ended their six-day losing streak on Wednesday, with the Dow Jones closing up more than 600 points and posting its third-biggest point gain ever.

The major averages closed about 4 percent higher for their best day since 2011. The Dow Jones industrial average rose 619.2 points, or 3.95 percent, to 16,285.64, the S&P 500 gained 72.88 points, or 3.9 percent, to 1,940.49 and the Nasdaq Composite added 191.05 points, or 4.24 percent, to 4,697.54.

Experts said the rally, which was led by Tech stalwarts Apple, Amazon and Google, erupted as fears about China's economy cooled and bargain hunters were emboldened by expectations the U.S. Federal Reserve might not raise interest rates next month.

Short-term traders, including many who had bet the market would fall, also jumped in to cut their losses, said Michael Matousek, head trader at U.S. Global Investors Inc in San Antonio. A strong rally on Tuesday had evaporated in the final minutes of trading and turned negative.

“A lot of people were anticipating the last half of the day would roll over and fall off and that hasn't happened," Matousek told Reuters. "You could see the buying accelerating at mid-day and people saying 'I'm wrong', and starting to cover their shorts.”

The gains erased some of the nearly 2,000 points shaved off the Dow Jones industrial average over the previous six days.

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Stocks closed lower by 1.3 percent overnight in China, even after the central bank there cut interest rates to help the economy. Investor worries about China, a major driver of global economic growth, have driven the furious sell-off in world markets.

In Europe, stocks were slightly higher on Wednesday.

Before Wednesday's rally, the Dow had lost about 1,900 points from Aug. 17 to Tuesday, and it was down about 14 percent from its all-time high in May — well into what is known as a correction.