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Stocks rebound: Dow jumps almost 300, Nasdaq surges 2.5%

David Carrig
USA TODAY

Stocks surged Wednesday as a tech rally helped Wall Street stage a rebound that sent the Dow up almost 300 points and pushed the Nasdaq back into positive territory for the year.

Traders work on the floor of the New York Stock Exchange.

The Dow Jones industrial average jumped 293.03 points, or 1.8%, to 16,351.38 as the blue-chip index recouped more than half of its 470-point drop in Tuesday's sharp sell-off. Leading the Dow higher were two tech giants: Apple (AAPL) shares gained 4.3% and Microsoft (MSFT) jumped 3.7%.

The Standard & Poor's 500 index gained 35.01 points, or  1.8%, to 1948.86 after dropping 58 points the previous session. The Nasdaq composite index gained 113.87 points, or 2.5%, to 4749.98.

The rally was broad-based as all ten of the S&P 500 sectors rose with technology and industrials leading the way.

Investors were encouraged by several positive economic reports released Wednesday that provided evidence that the U.S. economy continues to churn along despite fears of an economic slowdown in China.

• Businesses added 190,000 jobs in August, according to payroll processor ADP. The private sector survey provided a preview of Friday's government employment report on public and private employers. Economists surveyed by Bloomberg expect gains of 218,000 jobs.

"Job growth remains strong and broad-based, except in the energy industry, which continues to shed jobs.  Large companies also remain more cautious in their hiring than smaller ones,” said Moody's economist Mark Zandi.

• Worker productivity growth was revised sharply higher for the second quarter as labor costs fell. Productivity rose at a 3.3% annual rate, higher than the initial estimate of 1.3% and a sharp rebound from the first quarter's 1.1% drop.

• The Federal Reserve reported that the economy grew at a moderate pace over the summer months as consumer spending picked up in many parts of the country. The Fed's beige book report on regional conditions also showed the stronger dollar weighed on manufacturers.

The jobs picture is an important data point for the Federal Reserve as they consider raising interest rates. Economists are divided on whether they will raise rates at their next meeting Sept. 16-17.

"Outside of manufacturing, the domestic activity data is very strong. But Fed officials are clearly worried about an economic slowdown in China, commodity prices are lower, and there is little evidence of any marked pick-up in either wage growth or core inflation," Capital Economics economist Paul Ashworth said in a note.

Overseas, the Shanghai Composite lost 0.2% Wednesday on the last day of trading before a two-day holiday commemorating victory over Japan in World War II. The slide was relatively small compared to the index’s recent drops, which have often been 2% and higher. Analysts believe the government in Beijing has been directing state-owned agencies to buy up stocks in order to prop up prices and stop the slide.

Japan’s Nikkei 225 dropped 0.4% and Hong Kong’s Hang Send index fell 1%.

European benchmarks were higher, with Britain’s FTSE up 0.4%, France’s CAC-40 0.3% higher and Germany’s DAX rising 0.3%.

Contributing: William Cummings

Follow USA TODAY's David Carrig on Twitter @david_carrig.

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