While you were sleeping: Apple, Microsoft offer value as Wall Street rebounds

Wall Street rose, recovering part of the previous day's selloff as investors found value in some shares including Apple and Microsoft.

With concern about China's economic slowdown and its impact on global growth still at the forefront of investors' minds, recent slides in worldwide equity markets have improved the valuation equation for some stocks.

"Volatility will stay high for a while," Denmark-based Saxo Bank's private-banking unit chief investment officer Teis Knuthsen told Bloomberg.

"China is still making people panic and a lot of us are concerned that we'll break the lows from last week.”

However, he says many companies are starting to look cheap now and the market will eventually find a support level, especially if the US Federal Reserve doesn't raise rates this month.

At the close, the Dow Jones Industrial Average added 293.03, or 1.8%, to 16,351.38, recovering from Tuesday's 470-point drop.

The Standard & Poor's 500 Index rose 1.8% and the Nasdaq Composite Index climbed 2.5%.

Gains in shares of Apple and those of Microsoft, up 3% and 2.9% respectively, helped propel the Dow higher.

Investors are eyeing the US jobs reports to be released this week to gauge the chances the fed will raise interest rates at its meeting this month.

The US Federal Reserve's Beige Book says economic activity continued expanding across most regions and sectors during the reporting period from July to mid-August.

"Six Districts cited moderate growth while New York, Philadelphia, Atlanta, Kansas City, and Dallas reported modest increases in activity," it says. "The Cleveland District noted only slight growth since the last report.

"District reports on manufacturing activity were mostly positive, although among these, the Cleveland, St. Louis, Minneapolis, and Dallas districts painted a somewhat mixed picture. Only the New York and Kansas City Districts cited declines in manufacturing."

An ADP report showed US companies added 190,000 workers in August, following a downwardly-revised 177,000 in July. While short of expectations for about 200,000, the data still reflected a solid labour market.

Friday's government report is expected to show non-farm payrolls increased by 218,000, according to Bloomberg, while the unemployment rate is expected to fall to 5.2%.

"I think there is still a 50-50 chance of a September rate hike because the employment situation continues to be strong but, on the other hand, inflation and volatility remains a concern," Wunderlich Securities chief market strategist Art Hogan told Reuters.

"In some ways, I think the market would like to see a rate hike out of the way so that they know it's behind them for the time being," he said.

A separate report showed US factory orders rose a lower-than-expected 0.4% in July, down from an upwardly revised 2.2% in June.

In Europe, the Stoxx 600 Index finished the session with 0.3% increase from the previous close.

Germany's DAX Index gained 0.3%, as did France's CAC 40 Index, while the UK's FTSE 100 Index rose 0.4%.

The euro weakened against the US dollar ahead of the European Central Bank (ECB) policy meeting on Thursday.

"The global environment right now is deflationary," New York’s Credit Agricole SA foreign-exchange strategist Mark McCormick told Bloomberg.

"I don't think the ECB's going to react aggressively by adding to its policy, but the focus is definitely going to be on talking down the euro. That's the key policy measure they can use to try to boost inflation expectations."

China's stock markets will be closed on Thursday and Friday for ceremonies marking the end of World War II.

(BusinessDesk)