Brendan Mcdermid / REUTERS

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

Stocks extend rally after China cuts rates

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By msnbc.com news services

'Stocks extended the prior day’s rally Thursday after the Chinese central bank cut bank lending and deposit rates, fueling hopes of simultaneous action to aid a flagging global economy.
The Dow Jones industrial average opened with a gain of over 120 points, but was lately retreating from that level.
The surprise move by China's central bank to cut benchmark interest rates by 25 basis points to shore up slackening economic growth comes a day after hopes of more stimulus by central banks drove U.S. stock indexes up sharply in a turnaround from recent heavy losses.
The rate cut in the world's No. 2 economy had a sudden and dramatic impact on U.S. companies linked to China's commodity-hungry industrial complex.
"The dominant story obviously is the announcement of the cut in interest rates out of China. We are probably going to continue yesterday's rally focused on materials, energy, the areas in the U.S. I'd expect to benefit the most from a strengthening Chinese economy," said Peter Jankovskis, co-chief investment officer at Oakbrook Investments in Lisle, Illinois.
Federal Reserve Chairman Ben Bernanke is testifying before a congressional committee Thursday. Investors will parse his words closely after his No. 2, Janet Yellen, said the Fed was ready to support the economy.
U.S. stocks jumped Wednesday, giving the market its best day if the year, as talk of a rescue of Spain's troubled banks and hopes for more monetary stimulus sparked a rebound from recent selling.
After the S&P 500's 6-percent fall in May, and with the index below its 200-day moving average, the market was ripe for a rebound, analysts said. The index has reversed sharply above that closely watched level.
"We were also flirting with the low end of the trading band," said Gordon Charlop, a managing director at Rosenblatt Securities in New York. The S&P bounced up from the 1,290 level, and "this is something that kind of dovetails with the technical rally that we might have seen anyway," said Charlop.
European stocks jumped in morning trade, adding to the previous session's sharp rally, following the China rate cut and as investors bet policymakers in Europe could soon unveil measures to prop up ailing Spanish banks.
Even though Spain has not yet requested assistance and is resisting being placed under international supervision, Germany and European Union officials are urgently exploring ways to rescue the country's banking sector, sources said.
Green Mountain Coffee Roasters Inc is in talks with pharmaceutical companies about developing drinks for its Keurig brewers that it hopes could aid the health of consumers and company margins, a senior executive said.
Chesapeake Energy Corp need not delay its scheduled annual meeting on Friday to allow shareholders more time to investigate the financial dealings of the natural gas company's embattled chief executive, Aubrey McClendon, a federal judge ruled.
May's stock market rout dealt a blow to many on Wall Street, including several big hedge fund stars whose bets on prominent U.S. companies looked badly timed.
Oracle Corp launched a new suite of cloud-based products on Wednesday to try to catch up with smaller but nimbler vendors, such as Salesforce.com Inc, in the business of hosting and distributing software via the Internet.
Reuters contributed to this report.
CNBC's Rick Santelli breaks down the numbers from this week's jobless claims data, and discussing what it indicates about the nation's economic recovery and market outlook, with CNBC's Steve Liesman and Joshua Feinman, DB Advisors economist.