UKX FTSE 100 Index

By Ben St. Clair and Akane Otani 
   -- U.S. stocks rebound 
 
   -- Walmart soars on earnings 
 
   -- Emerging-market index nears bear market 

U.S. stocks soared Thursday, putting the Dow Jones Industrial Average on course for its biggest one-day gain in four months, as a string of upbeat earnings helped dim investors' fears about the global economy.

Stocks around the world had slumped just a day earlier as a wave of selling that had hit Turkey's lira spread through a variety of markets, pulling everything from copper to European stocks lower.

Much of the selling had been driven by fears among investors that what had begun as a relatively limited pullback in emerging markets could trigger a more violent, durable reversal across risky assets around the world.

But some of those worries faded Thursday as assets such as commodities prices and the Turkish lira stabilized and a flurry of upbeat data and earnings reports pointed to sustained strength in the U.S. economy.

Signs that Washington and Beijing were willing to resume negotiations on trade also helped reassure investors, sending both stocks and Treasury yields higher.

The Dow Jones Industrial Average rose 402 points, or 1.6%, to 25563 -- on track for its biggest one-day percentage gain since April 10. The S&P 500 added 1%, nearing its January record, and the Nasdaq Composite advanced 0.9%.

Officials in China and the U.S. signaled Thursday that the two countries would hold lower-level talks on trade later in August. The discussions would be the first since May, when talks fell through and both sides later slapped penalties on tens of billions of dollars in each other's goods.

Shares of companies that have swung on trade tensions rallied, with Caterpillar rising 2.6%, Century Aluminum adding 7.2% and Boeing jumping 3.9%.

Gains in the consumer-staples sector also helped buoy major indexes, with Walmart soaring 10% after it reported sales rising at the fastest pace in over a decade for the most recent quarter.

Elsewhere, stocks in Europe clawed back some of their declines from Wednesday, boosted by gains in the basic resources and technology sectors. The Stoxx Europe 600 edged up 0.5%.

Major indexes in Asia extended a recent rout, however, with the Shanghai Composite Index down 0.7% and Hong Kong's Hang Seng 0.8% lower.

Declines in technology companies Tencent and Samsung drove the MSCI Emerging Markets Index toward bear-market territory, typically defined as a 20% drop from a recent peak. The two companies make up roughly 8.6% of the index.

A stronger dollar and trade tensions have put pressure on developing economies in recent months, and Turkey's currency crisis has added to the strain as investors remained wary of possible contagion.

When it comes to investing in emerging markets, "the timing is key," said Laurent Denize, co-chief investment officer of ODDO BHF Asset Management. "The timing is linked to politics."

In Turkey, investors have been concerned by how politics has threatened the independence of the country's central bank, and have driven the Turkish currency lower as a result.

Still, the lira posted gains for its third straight day Thursday, rising 1.8% against the U.S. dollar. In a show of support Wednesday, Qatar said it would inject $15 billion into Turkey with a package that includes direct investments and deposits. Later Thursday, Finance Minister Berat Albayrak is expected to hold a conference call with investors.

"The bigger question is whether this is a case of crisis averted or crisis deferred, and the probability is that it is the latter given that Turkey's problems remain unresolved," wrote Michael Hewson, chief market analyst at CMC Markets UK, in a note Thursday.

Write to Akane Otani at akane.otani@wsj.com

(END) Dow Jones Newswires

August 16, 2018 13:15 ET (17:15 GMT)

FTSE 100
Index Chart
From Mar 2024 to Apr 2024

FTSE 100
Index Chart
From Apr 2023 to Apr 2024