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US: Stocks rally from morning dive

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[NEW YORK] US stocks finished higher on Tuesday in a topsy-turvy session, rallying after worries about Greece and China caused deep losses in early trade.

The Dow Jones Industrial Average ended up 93.33 points (0.53 per cent) to 17,776.91 after earlier falling more than 200 points.

The broad-based S&P 500 jumped 12.58 (0.61 per cent) to 2,081.34, while the tech-rich Nasdaq Composite Index rose 5.52 (0.11 per cent) to 4,997.46.

Analysts described unease at the latest drops in Chinese stocks, a sign efforts by the Chinese government to stabilize equity markets are falling short. Chinese stocks have fallen more than 30 per cent since mid-June.

Worries about Greece also dragged on stocks. German Chancellor Angela Merkel and French President Francois Hollande said Athens must offer "precise" proposals to restart bailout talks.

Gregori Volokhine, president of Meeschaert Capital Markets, said the mid-session rally shows US investors remains fairly optimistic despite Greece and China.

"The market is not genuinely scared," he said.

Other analysts said the rally was a technical bounce after equities held above a critical level.

US-listed Chinese companies fell, including e-commerce giant Alibaba (-0.8 per cent), as well as the smaller social networking platform Renren (-7.0 per cent), Qihoo 360 (-7.1 per cent) and Youku Tudou (-6.7 per cent).

Banking shares were weak, including Dow member JPMorgan Chase (-0.8 per cent), Citigroup (-1.1 per cent) and Bank of America (-1.5 per cent).

Consumer products stocks jumped, with Procter & Gamble and Colgate-Palmolive gaining 2.1 per cent and Kimberly-Clark rising 2.0 per cent.

Pharma company Depomed powered 38.7 per cent higher following an unsolicited takeover bid from Horizon Pharma for about US$3 billion. Horizon declined 2.0 per cent.

Tesla Motors fell 4.2 per cent following a downgrade from Deutsche Bank, which said it remains bullish on Tesla's prospects, but that the stock is fully valued.

Bond prices rose. The yield on the 10-year US Treasury fell to 2.26 per cent from 2.29 per cent, while the 30-year dropped to 3.04 per cent from 3.09 per cent. Bond prices and yields move inversely.

AFP