Stocks climb, trimming August losses; commodities up

Markets have turned sharply in recent days, rebounding from several weeks of losses that put the MSCI All-World index on track for its worst month in more than a year.
Mounting speculation the US Federal Reserve was preparing a new round of monetary expansion has helped the market regain its footing. The Fed’s minutes from its latest policy session bolstered a growing belief the central bank will hint at new stimulus after its $600 billion bond-buying program expired in June.
If its efforts, along with fiscal stimulus plans, are enough to forestall a recession, the market could continue to recover.
“The depth of the slowdown is going to depend on what monetary and fiscal stimulus we see in the US,” said Gonzalo Fernandez, analyst at Santander in Mexico City.
US economic data released on Wednesday showed the economy continues to struggle, with the pace of private sector job growth slowing in August for the second straight month. Factory activity in the Chicago region expanded at its slowest pace since November 2009.
At 2:45 p.m. EDT (1845 GMT), the Dow Jones industrial average was up 9.91 points, or 0.09 percent, at 11,569.86.
The Standard & Poor’s 500 Index was up 1.41 points, or 0.12 percent, at 1,214.33. The Nasdaq Composite Index was down 11.09 points, or 0.43 percent, at 2,565.02.
Among the most actively traded US stocks were AT&T, which fell more than 4 percent after the US Justice Department said it would block the cellphone company’s merger with T-Mobile USA on anti-competition concerns.
European shares were up almost 3 percent and world equities gained over 1 percent.
For the month, US stocks were down about 5 percent, on track to post the steepest monthly loss since June 2010. Global shares, tracked by the MSCI All World, showed a 7 percent drop, their worst month since May last year.
Minutes of the Fed’s August meeting, released on Tuesday, showed the central bank considered a range of actions to help the struggling economy, including the unprecedented step of tying interest rate policy to a specific unemployment level.
In a note released Wednesday, economists at Goldman Sachs commented that the Fed was “more dovish than expected,” indicating the possibility of stimulus at the September 20-21 meeting was “an even closer call than we thought previously.”
Chicago Federal Reserve Bank President Charles Evans on Tuesday made clear he supported further action to support growth, while Minneapolis Fed chief Narayana Kocherlakota suggested further stimulus would have a hard time winning his support.
Commodities, tracked by the Reuters-Jefferies CRB index, were poised to end the month in the positive after a sharp fall in early August. Copper futures in New York jumped almost 2 percent to a one-month high of nearly $4.25 a lb.
Crude oil futures in London were up 1 percent, trading above $115 a barrel. Oil was further boosted by a government report showing a steep drawdown last week in US gasoline stockpiles.
Spot gold was down almost 1 percent but off session lows, trading at around $1,824 an ounce as rising equity markets weakened safe-haven bids.
In currency trading, the dollar slid to a session low against the yen, touching 76.84 yen and marking a new bottom since Aug 19. For the month, the dollar was flat against a basket of currencies.
US Treasuries fell, with the benchmark 10-year note down 8/32, its yield at 2.2022 percent.
On Thursday, the Institute for Supply Management is to release its index of US national manufacturing activity and the Labor Department on Friday issues the US nonfarm payrolls report for August.