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Wall Street closes higher after wild trading day

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The Dow Jones has ended its day 2.3 per cent higher at 24,913, clawing back its massive losses from the previous day when it suffered its biggest one-day plunge in years.

Stocks swung wildly between positive and negative territory on a highly volatile trading day. The Dow traded in an almost 1,000-point range from the opening to closing bells.

The S&P 500 has risen by 1.7 per cent, while the Nasdaq has lifted by 2.1 per cent.

Over the past week, $5.1 trillion ($US4 trillion) has been wiped off stock markets around the world.

Market snapshot at 8:15am (AEDT):

  • ASX SPI 200 futures +1.7pc, ASX 200 (Tuesday's close) -3.2pc at 5,833
  • AUD: 78.84 US cents, 56.5 British pence, 63.65 Euro cents, 86.31 Japanese yen, $NZ1.08
  • US: Dow Jones +2.3pc at 24,913, S&P 500 +1.7pc at 2,695, Nasdaq +2.1pc at 7,116
  • Europe: FTSE -2.6pc at 7,141, DAX -2.3pc at 12,393, Euro Stoxx 50 -2.5pc at 3,393
  • Commodities: Brent crude -1.1pc at $US66.85/barrel, spot gold -1.2pc at $US1,322.81/ounce, iron ore +0.3pc at $US75.92/tonne

European equities hit a six-month low, with London and Paris indexes each down more than 2 per cent.

Hong Kong and Tokyo stocks saw steeper drops.

Hong Kong's Hang Seng Index dropped 5.1 per cent and Japan's Nikkei dived 4.7 per cent, its worst fall since November 2016, to four-month lows.

Taiwan's main index lost 5.0 per cent, its biggest slump since 2011.

Losses for MSCI's widely tracked 47-country world index broke $4 trillion, with shares in emerging markets down sharply.

The swings on Wall Street indexes were wide, with an 89-point difference between the benchmark S&P 500 index's intraday high and low.

"We're bouncing around here," Janna Sampson, co-chief investment officer at Oakbrook Investments LLC in Lisle, Illinois, said.

"The market clearly hasn't decided what the sentiment for the day is."

US Treasury Secretary Steven Mnuchin played down worries about a selloff in US and global stock markets, saying that recent volatility was not enough to rock market fundamentals.

The selloff in stocks that began last week has been built on concerns over higher interest rates and lofty valuations.

Some strategists view it as a healthy pullback after a rapid run-up in the start of the year and strong 2017 gains, and say the improving economic outlook is positive for stocks overall.

Bond prices up

US Treasury prices gained as volatile equity markets led investors to seek out lower-risk bonds, though many investors remained nervous after a week-long bond rout sent yields on Monday to four-year highs.

The original trigger for the equities sell-off was a sharp rise in US bond yields late last week after data showed US wages increasing at the fastest pace since 2009.

That raised the alarm about higher inflation and, with it, potentially higher interest rate.

Commodities remained gloomy, with oil and industrial metals all falling as the year's stellar start for risk assets rapidly soured.

US crude fell 0.39 per cent to $63.90 per barrel and Brent was last at $67.14, down 0.71 per cent.

Copper lost 1.35 per cent to $7,072.50 a tonne.

The dollar rose to its highest point in more than a week against a basket of currencies as traders piled back into the greenback amid the rout in stocks.

The dollar index last rose 0.05 per cent, with the euro up 0.19 per cent to $1.239.

Bitcoin swings

Bitcoin recovered from three-month lows below $6,000, but worries lingered about a global regulatory clampdown and moves by banks to ban buying bitcoin with credit cards.

Investors swooped in after a steep fall. On the Luxembourg-based Bitstamp exchange, bitcoin hit $5,920, its lowest since mid-November, before recovering to above $7,000.

Bitcoin has slumped in recent sessions as a risk-off mood spread across financial markets.

It has fallen about 70 per cent from its peak of almost $20,000 in December and was down nearly 50 per cent so far this year.

Reuters

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