U.S. equities were recovering from stocks worst day in four years after China's central bank announced a rate cut. Jeanne Yurman reports.
U.S. stocks rebounded sharply after a punishing 'Black Monday' as bargain hunters looked to scoop up stocks at beaten down prices. Investors momentarily tabled concerns that a slowdown in China - the world's second largest economy - would drag down the global economy after the asian country's central bank said, it would cut interest rates for the second time in two months to juice up economic activity. But market watchers remain cautious. While stock prices are now factoring in lower growth in China, its outlook is still quite murky and where the markets may ultimately settle is unclear. Kevin O' Leary Chairman of O'Shares Investments: SOUNDBITE: KEVIN O'LEARY, CHAIRMAN, O'SHARES INVESTMENTS (ENGLISH) SAYING: "Instead of thinking of China growing at eight percent, we think, it's going to grow five or six percent. That's 20 percent less growth than anticipated. All of a sudden, investors are no longer interested in paying 20 PE if the true growth of international markets that represented half of the sales of the S&P aren't going to be what was advertised." Other investment strategists interviewed by Reuters say, we won't be sure the worst is over until we see consistent positive economic data points out of China.