China news boosts stocks – Albany Times Union

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U.S. stocks surged to their biggest gain in two months on Tuesday after the Chinese government moved to stimulate the world’s second-largest economy. That gave a big boost to energy, chemicals and machinery companies.

For months investors have worried about the state of China’s economy, which is slowing down after a quarter-century of rapid growth. The prospect of greater sales to China lifted companies that make basic building materials, chemicals, building and mining equipment, and aircraft. The price of oil matched a six-month high and companies that drill for oil and refine it rose. All 10 industrial sectors of the Standard & Poor’s 500 index finished higher.

Investors have been taking money out of stocks lately, said Bob Doll, chief equity strategist and senior portfolio manager at Nuveen Asset Management. He said they were glad to see China’s government do something about its economy.

“It’s just another small step on the way of China attempting to address the issue,” he said. “This is a ray of sunshine which is needed.”

The Dow Jones industrial average jumped 222.44 points, or 1.3 percent, to 17,928.35. The Standard & Poor’s 500 gained 25.70 points, or 1.3 percent, to 2,048.39. The Nasdaq composite index rose 59.67 points, or 1.3 percent, to 4,809.88.

Stocks overseas traded mostly higher after China’s cabinet approved measures to boost exports as Beijing struggles to reduce gluts in many industries and reverse an export decline that threatens to cause job losses. The moves include more bank lending, greater tax rebates, and support for export credits.

General Electric picked up 61 cents, or 2 percent, to $30.48 and aerospace giant Boeing rose $2.62, or 2 percent, to $134.72. Companies that make chemicals and other basic materials also rose. Dow Chemical gained 70 cents, or 1.4 percent, to $51.54 and Martin Marietta Materials rose $5.60, or 3.1 percent, to $187.85.

U.S. crude rose $1.22, or 2.8 percent, to $44.66 a barrel in New York. Brent crude, the benchmark for international oil prices, gained $1.89, or 4.3 percent, to $45.52 a barrel in London.