US Stocks Rebound in Volatile Start to September Trading

After a losing streak, U.S. stocks had a partial comeback amid global concerns.

— -- Stocks rebounded today after a three-day losing streak despite continued volatility from global financial markets.

The Dow Jones Industrial Average gained 293 points, or 1.8 percent, to 16,351, at the end of trading in New York, while the S&P 500 increased 35 points, or 1.8 percent. The NASDAQ composite moved higher about 114 points, or 2.5 percent.

Earlier today, the Shanghai Composite Index closed 0.2 percent lower at about 3,160, the last day of trading before the market closes for a two-day holiday celebrating the 70th anniversary of Japan's defeat in World War II.

Bill Stone, chief investment strategist with PNC Asset Management Group, said there are three main drivers of volatility in the markets. First, there's the impending interest rate hike by the Federal Reserve and the uncertainty surrounding its timing. The U.S. central bank hasn't raised interest rates in nearly a decade, and some economists expect the nation's central bank to do so this fall. Some economists fear that a hike in interest rates and a subsequent increase in mortgage rates could lead to a fall in housing prices and slow down in job growth.

Another factor contributing to volatility is the steep decline in oil prices, hovering around six-year lows. Some fear this could be a signal of a significant global slowdown, Stone said.

Third, investors are concerned about the global divergence in economic growth. A report in China on Tuesday said manufacturing in that country fell to a three-year low last month, moving U.S. stocks lower. American investors fear that an economic slowdown in China will affect business activity at home.

"The prime example is China, and the markets have been on edge with the slowing of Chinese economy and the deep decline in their stock market," Stone said.

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