By Jessica Menton -
U.S. stocks rebounded Tuesday, with the Dow Jones Industrial Average soaring more than 300 points, after China cut its benchmark interest rate for fifth time in nine months in an attempt to boost slowing economic growth. The move comes after global stock markets sold-off sharply a day earlier on fears of a faster-than-expected slowdown in the world’s second-largest economy.
The Dow Jones Industrial Average (INDEXDJX:.DJI) soared 336 points, or 2.12 percent, to 16,210.01. The S&P 500 index (INDEXSP:.INX) rose 40 points, or 2.17 percent, to 1,930.85. And the Nasdaq composite (INDEXNASDAQ:.IXIC) gained 143 points, or 3.5 percent, to 4,657.67.
Global markets rallied higher after the Chinese central bank announced plans to cut its one year lending rate to 4.6 percent, which the People's Bank of China said was provide long-term liquidity and help support the economy. The move came after China’s benchmark Shanghai Composite index slid further Tuesday, losing 7.6 percent to close below the physiological 3,000 mark.
Following the announcement, the pan-European STOXX 600 leaped more than 4 percent, while France's CAC and Germany's DAX rallied 4.7 percent and 4.8 percent, respectively.
U.S stocks recovered Monday from some of the morning's mayhem that saw the Dow Jones Industrial Average plummet more than 1,000 points in the first four minutes of trading. By the close, the Dow was down just 588 points.
The CBOE Volatility Index, also known as the VIX, spiked as much as 90 percent to 53 following Monday's opening bell. The last time the index jumped above 50 was in March 2009.
The New York Stock Exchange invoked Rule 48 for the second day in a row Tuesday to pre-empt panic selling, Dow Jones reported.