NEW YORK — Two things that have supported US stocks in the past, dovish words from the Federal Reserve and improving economic data, triggered the biggest rally since 2011 and halted a plunge that erased $2.2 trillion from share values.
Technology companies led the gains, with Apple, Google, and Intel rising at least 5.5 percent. Amazon.com surged 7.4 percent, and Netflix posted a two-day gain of 14 percent. JPMorgan Chase & Co. and Citigroup rose more than 4.8 percent, while Cameron International soared 41 percent after agreeing to be bought by Schlumberger Ltd. in a $14.8 billion deal.
Gains in equities accelerated in the final hour as the Standard & Poor’s 500 climbed 3.9 percent, halting a six-day slide that was its steepest in four years. The Dow Jones industrial average added 4 percent; the Nasdaq Composite 4.2 percent, its strongest increase since August 2011. About 10.7 billion shares traded hands on US exchanges, 55 percent above the three-month average.
“This type of short-term rally shouldn’t be much surprise, given recent weakness,” said Chad Morganlander, at Stifel, Nicolaus & Co. “Eventually the reality that valuations have come off so much will come into play.”
The turmoil in global stock markets, sparked by growth concerns, has reduced expectations for the Federal Reserve to increase interest rates as soon as next month. The New York Fed’s president, William Dudley, said Wednesday that the upheaval has reduced the case for raising rates in September, and cautioned that it’s important not to overreact to short-term events.
Traders are pricing in a one-in-four chance the central bank will act at its next meeting, down from almost even odds before China’s surprise currency devaluation earlier this month.
Fed policy makers remain focused on economic data. A report Wednesday showed orders for capital goods increased in July by the most in more than a year, indicating corporate spending was finding its footing prior to the turmoil in the financial markets. Orders for all durable goods — items meant to last at least three years — rose 2 percent.
More than $2 trillion had been erased from American equity values since the S&P 500 started its losing streak, breaking a calm in a stock market that had gone almost four years without a 10 percent correction. The measure plunged 11 percent in the six days through Tuesday, the most since the United States was stripped of its AAA credit rating by S&P in August 2011, and was 1 percent away from erasing its gains since the end of 2013.
“It’s definitely a positive to see markets move higher,” said Tom Manning, at Boston Private Wealth, which oversees about $9 billion in assets. “I don’t know that we found the bottom. I’m not convinced we don’t have more negative days to follow. We’re not likely to go from extreme volatility to extreme calm overnight.”
A rally in the first few minutes of trading Wednesday eroded by more than half throughout the morning, before an afternoon rebound took over. That was the opposite of Tuesday’s action when more than 440 points on the Dow disappeared by the final hour of trading.
The Chicago Board Options Exchange Volatility Index slipped 16 percent Wednesday to 30.32. The measure of market turbulence, known as the VIX, declined for a second day after a record six-day jump sent the gauge to its highest level since October 2011.
All of the S&P 500’s 10 main industries advanced at least 1.6 percent. Tech had its bewt day since March 2009, while the health care group rose the most in four years.
Biotechnology shares hard hit in the downdraft recovered, with Amgen and Biogen rising at least 5.8 percent. The Nasdaq Biotechnology Index climbed 5.1 percent, its largest jump since August 2011.
Banks in the S&P 500 had their strongest increase in more than three years; Wells Fargo & Co. and Bank of America Corp. gained at least 4.5 percent.