Stocks Open Sharply Higher as Global Markets Rebound

U.S. stocks opened sharply higher on Tuesday, as global markets extended gains after Beijing cut interest rates on the heels of another sharp drop in China’s shares. The Dow Jones Industrial Average lately advanced 351.36 points, or 2.21%, to 16,222.71. The S&P 500 rose 39.19 points, or 2.07%, to 1,932.40. The Nasdaq rose 110.91 points, or 2.45%, to 4,637.15.

China’s central bank on Tuesday cut its benchmark interest rate and freed banks to lend more, the latest signs of the government’s growing distress over slumping stocks and slowing economic growth. The People’s Bank of China (PBOC) said it was cutting the one-year benchmark bank lending rate by 25 basis points to 4.6 percent, cutting one-year benchmark deposit rates by the same amount, and reducing reserve requirements (RRR) by 50 basis points to 18 percent for most big banks.

U.S. single-family home prices rose a tad faster from a year ago in June, suggesting resilience in the housing sector as the Federal Reserve has stuck to a near-zero interest rate policy, a closely watched survey said on Tuesday. The S&P/Case Shiller composite index of 20 metropolitan areas in June gained 5.0 percent year over year, a bit quicker than the 4.9 percent rate in May.

Oil bounced back from heavy losses on Tuesday but global oversupply and worries about the severity of the economic slowdown in China, the world’s top commodity consumer, kept prices near 6-1/2-year lows. U.S. crude, also known at West Texas Intermediate or WTI, was up $1.40 at $39.64 a barrel by 1220 British time, while Brent was up $1.50 at $44.19.