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1st LD Writethru: U.S. stocks rebound strongly on China stimulus

Xinhua, April 21, 2015 Adjust font size:

U.S. stocks posted solid gains Monday, following a big decline in the previous session, as China moved to stimulate its economy.

The Dow Jones Industrial Average jumped 208.63 points, or 1.17 percent, to 18,034.93. The S&P 500 added 19.22 points, or 0.92 percent, to 2,100.40. The Nasdaq Composite Index surged 62.79 points, or 1.27 percent, to 4,994.60.

The People's Bank of China (PBOC), the country's central bank, on Sunday decided to lower the reserve requirement ratio (RRR), the minimum level of reserves banks must hold, by one percentage point effective from Monday. This is the second time that the central bank has adopted an across-the-board RRR cut plus targeted cuts following a similar move on Feb. 4.

After the latest change, big banks must hold 18.5 percent of their deposits in reserves.

The move aims to "boost structural adjustment," the PBOC said, adding it will give an additional one-percentage-point RRR cut to banks engaged in lending to small firms, the farming sector and major water projects.

There was no major U.S. economic data due on Monday, and Friday 's durable orders will be this week's highlight.

In corporate news, Morgan Stanley on Monday reported net revenues of 9.9 billion U.S. dollars for the first quarter, above market's forecasts. Its quarterly adjusted earnings per share beat analysts' expectations as well. Its shares went up 0.57 percent to 36.96 dollars apiece.

After the closing bell Monday, IBM announced its first-quarter 2015 diluted earnings from continuing operations of 2.44 dollars per share, beating market consensus. Its shares rose in after- hours trading.

Latest data from Thomson Reuters showed that the S&P 500's blended earnings in the first quarter of 2015 are expected to decline 1.9 percent year on year, while the revenue is forecast to decrease 3 percent.

U.S. equities suffered big losses Friday, with the Dow Jones Industrial Average shedding more than 350 points at its session low, as stronger American inflation data and Greece debt crisis spread jitters across the markets. Endite