US stocks could rebound this week on brighter economic data

LAST week, US stocks fell sharply as traders hedged against the possibility that the Chinese economic miracle was coming to an end.

This week, stocks could rebound somewhat as a US gross-domestic product (GDP) report and the Federal Reserve's latest policy statement should point to brighter prospects for the economy.

The latest report from Beijing indicated that the world's second-largest economy grew at a 7 per cent rate in the second quarter, right on target. But the sudden collapse of the stock market earlier this month and some comments from multinational executives last week have sparked a debate over whether Beijing is airbrushing the economic picture.

Last week, hedge-fund titan Ray Dalio's Bridgewater Associates firm warned that the bursting of China's stock bubble would affect consumer psychology and lead to a slowdown in the real economy. United Technologies, which makes elevators and helicopters, International Business Machines, which sells computer services, and Whirlpool, which sells washing machines, all said demand from the…