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1st LD Writethru: U.S. stocks rebound strongly to kick off December

Xinhua, December 2, 2015 Adjust font size:

U.S. stocks posted solid gains Tuesday, the first trading day for December, as investors awaited major central banks' decisions later this month.

The Dow Jones Industrial Average rose 168.43 points, or 0.95 percent, to 17,888.35. The S&P 500 jumped 22.22 points, or 1.07 percent, to 2,102.63. The Nasdaq Composite Index gained 47.64 points, or 0.93 percent, to 5,156.31.

The European Central Bank (ECB) is expected to expand its easing program and cut its negative deposit rate further on Thursday.

Meanwhile, investors were looking to Friday, which will see key November employment data, the last jobs report for the year, before the Federal Reserve decides on interest rates at its December meeting.

Wall Street expected a historic divergence in monetary policy by two central banks as the Fed was on track for an interest-rate hike this year while its European counterpart was expected to unleash further stimulus.

On the economic front, the U.S. November manufacturing purchasing managers' index (PMI) registered 48.6 percent, a decrease of 1.5 percentage points from the October reading of 50.1 percent, said the Institute Supply Management (ISM) Tuesday.

The print, well below market expectations, was the worst since June 2009 and the first time the index fell below 50 in three years.

"There is a clear downward trend in the national index since the summer of 2014 which shows little sign of abating. It is hard to see how the trend reverses if the dollar continues to strengthen in reaction to monetary policy in the US diverging from other developed countries," said Chris Low, chief economist at FTN Financial.

On Monday, the International Monetary Fund (IMF) executive board decided to include the Chinese currency, the yuan, to its Special Drawing Rights (SDR) basket, marking a milestone in the renminbi (RMB)'s global march and a vote of confidence in China's ongoing financial reforms.

Chinese shares continued to rise Tuesday following the IMF's decision, with the benchmark Shanghai Composite Index going up 0.32 percent to close at 3,456.31 points.

European equities ended mixed on Tuesday. Germany's benchmark DAX index at the Frankfurt Stock Exchange decreased 1.06 percent, while British benchmark FTSE 100 Index increased 0.62 percent. Endit