U.S. stocks closed sharply higher on Wednesday as investors sought bargains among beaten-down stocks and the recently battered biotechnology index bounced back on the last day of Wall Street’s worst quarter since 2011.
For much of the third quarter, global markets were rocked by fears of slowing growth in China and uncertainty over timing for a U.S. Federal Reserve hike of interest rates. Biotech had a seven-day selloff kicked off by drug price regulation worries.
“I don’t think there was a specific piece of news driving the market today. We got very oversold,” said Brian Fenske, head of sales trading at ITG in New York. “When everybody gets bearish quickly, you tend to get these bounces.”
Investment strategists and traders said it was too soon to expect Wednesday’s rally to be sustainable. However, instead of trying to bet on the rate hike timing, Fenske said that investors will now focus on economic data and look ahead to the third-quarter earnings season, which begins next week.
The Dow Jones industrial average .DJI rose 235.57 points, or 1.47 percent, to 16,284.7, the S&P 500 .SPX gained 35.94 points, or 1.91 percent, to 1,920.03, and the Nasdaq Composite .IXIC added 102.84 points, or 2.28 percent, to 4,620.17.
For the quarter, the Dow fell 7.6 percent, the S&P lost 6.9 percent and Nasdaq fell 7.4 percent. For September, the Dow fell 1.5 percent while the S&P dropped 2.6 percent and Nasdaq fell 3.3 percent.
Trading was heavy on Wednesday with 8.52 billion shares changing hands on U.S. exchanges,…