US open: Dow jumps 200 points as Wall Street rebounds from heavy losses

US equities jumped early on Wednesday, as Wall Street looked to bring a two-day rout to an end.

Shortly before 1500 BST, the Dow Jones Industrial Average was up 209 points to 16,267.67, while the S&P 500 and the Nasdaq were 22 and 56 points higher respectively.

Wall Street endured a torrid day on Tuesday, with the Dow Jones experiencing its third-biggest drop of the year, as disappointing economic data from China weighed on sentiment.

However, with Chinese markets closed on Thursday and Friday for the World War Two Victory Day parade, the remainder of the week should register a drop in the volatility that has characterised global markets over the last month.

"The saving grace could be the two-day Chinese holiday that begins on Thursday, which in theory should provide a moment of respite for volatility-weary investors and therefore a chance to avoid the usual last minute panic in the minutes before the closing bell," said Connor Campbell, financial analysts at Spreadex.

On Wednesday, the Shanghai Composite shed 0.2% for a 2.2% slide over the week, while European stocks reversed earlier losses after a slow start.

Wednesday data

According to Automatic Data Processing (ADP), employers added 190,000 jobs in August, while July's figure was revised down to 177,000 from a prior estimate of 185,000. Analysts had expected a reading of 200,000.

"We look to Friday’s official employment report from the Labor Department as a more reliable indicator of US labor markets," analysts at Barclays said in a note.

"We continue to expect non-farm payroll growth of 225k and a one-tenth decline in the unemployment rate, to 5.2%."

There was more positive news in the housing market, as the Mortgage Bankers Association (MBA) said its seasonally adjusted index of application activity, which covers home purchase demand and refinancing demand, climbed 11.3% in the week ended 28 August.

Meanwhile, US productivity in the second quarter was raised to a 3.3% annual pace from an original 1.3%, reflecting an earlier revision in gross domestic product that showed the economy was much stronger in the spring than initially reported.

Still to come, a report on July factory orders is on tap at 1500 BST.

In company news, telecom group AT&T climbed 1.08% after saying that TRC Capital Corp. has made an unsolicited “mini-tender” offer to buy up to 3m of its shares.

AT&T recommended that shareholders should reject the offer.

Tech giant Intel Corp. was up 1.55% and could be in focus after saying late Tuesday it would overhauling its flagship line of computer chips.

McDonald’s rose 1.90% after announcing that it will offer all-day breakfast at its US restaurants from next month. The fast food giant has been testing out all-day breakfast options since March in some of its worldwide franchises.

Handbags and accessories designer Vera Bradley surged 17.6% after its second quarter results beat expectations, while GoPro slumped to a five-month low, losing 7.26%.

Elsewhere, the dollar was broadly flat against the pound and rose 0.38% and 0.54% against the yen and the euro respectively, while gold futures slid 0.27% to $1,136.70.

Oil prices rebounded after losing over 9% in the previous session, as West Texas Intermediate gained 1.52% to $46.11 a barrel, while Brent rose 2.06% to $50.60 a barrel.