Roundup: U.S. stocks surge after long weekend

U.S. stocks soared Tuesday after a long weekend, as investors bought the dip after last week's rout.

The Dow Jones Industrial Average jumped 390.30 points, or 2.42 percent, to 16,492.68. The S&P 500 gained 48.19 points, or 2.51 percent, to 1,969.41. The Nasdaq Composite Index spiked 128.01 points, or 2.73 percent, to 4,811.93.

U.S. stocks witnessed sharp losses the previous week, with the main indexes notching their second-worst weekly decline in 2015.

Some analysts said investors were in a buying mood again after the sell-off, as the stabilization in global stock markets soothed anxious investors.

U.S. traders were cheered by gains in China's stock market Tuesday. Chinese shares rebounded after encouraging news about introduction of an index circuit breaker system and a dividend tax break.

The benchmark Shanghai Composite Index ended at 3,170.45 points, up 2.92 percent.

European equities also increased broadly Tuesday, with British benchmark FTSE 100 Index rising 1.18 percent, as the euro area's gross domestic product was revised up slightly.

Meanwhile, Wall Street remained focused on the Federal Reserve ahead of its key policy meeting next week, when the U.S. central bank could raise interest rates for the first time in more than nine years.

With no major economic data due out Tuesday, investors were still sifting through the key jobs report released Friday.

The Labor Department reported that total nonfarm payroll employment added 173,000 in August, well below market consensus of 223,000.

The unemployment rate, however, inched down to 5.1 percent, beating market estimates of 5.2 percent and logging the lowest level in seven years.

U.S. markets were closed Monday for the Labor Day holiday.

The CBOE Volatility Index, often referred to as Wall Street's fear gauge, decreased 10.43 percent to end at 24.90 on Tuesday.

In other markets, London oil price gained as global stock markets rallied.

The West Texas Intermediate for October delivery moved down 11 cents to settle at 45.94 dollars a barrel on the New York Mercantile Exchange, while Brent crude for October delivery increased 1.89 dollars to close at 49.52 dollars a barrel on the London ICE Future Exchange.

The U.S. dollar dropped against most major currencies as investors lowered their expectations for an interest-rate hike as soon as September ahead of the Fed's policy meeting next week.

In late New York trading, the euro rose to 1.1187 dollars from 1.1170 dollars in the previous session, while the dollar bought 119.99 Japanese yen, higher than 119.28 yen of the previous session.

Gold futures on the COMEX division of the New York Mercantile Exchange settled slight lower as U.S. stocks rally shifted investors' attention.

The most active gold contract for December delivery lost 0.40 dollar, or 0.04 percent, to settle at 1,121.00 dollars per ounce. Endit