Global stocks jumped on Tuesday morning following a better-than-expected reading on Chinese manufacturing in August, which suggested that the world's second largest economy might be approaching the tarmac for a soft landing.
U.S. stock index futures were higher with about two hours before markets open, suggesting that stocks will rise at the start of trading. Futures for the Dow Jones industrial average were up 131 points or 1.2 per cent. Futures for the broader S&P 500 were up 16 points or 1.4 per cent.
Stocks showed early gains on Monday as well, only to hand most of them back in later trading as investors swung between upbeat feelings about potential Federal Reserve monetary stimulus later this week and a dismal-looking global economy, where economists have been slashing expectations for growth.
This time, the upbeat feelings seem to have an edge, and they are being bolstered by good news from China. There, manufacturing activity -- as represented by the purchasing managers index for August -- came in below 50, which is the threshold between expansion and contraction. However, the reading of 49.8 beat expectations and rose a touch over the previous month's reading, providing some hope that the economy is slowing at a moderate pace.
In Europe, the U.K.'s FTSE was up 1.2 per cent and Germany's DAX index was up 1.5 per cent in afternoon trading. In Asia, Japan's Nikkei 225 rose 1.2 per cent in overnight trading.
David Berman