European stocks posted their first back-to-back gains in two weeks, following the worst quarter since 2011.
The Stoxx Europe 600 Index rose 1.1 percent to 351.75 at 8:08 a.m. in London, as all 19 industry groups advanced. Miners and auto stocks, which bore the brunt of last quarter’s selloff, led gains today. Glencore Plc rallied for a third day, up 5.3 percent, after briefly erasing Monday’s record slump. Fiat Chrysler Automobiles NV and Volkswagen AG advanced 3.2 percent or more.
European’s benchmark measure tumbled 8.8 percent in the past three months as concern over a slowdown in China and confusion over the trajectory of U.S. interest rates stoked volatility.
A report showing China’s official factory gauge stabilized near a three-year low in September bolstered investor confidence today, while a release on U.S. manufacturing later may provide clues on the strength of the world’s largest economy.
Traders are pricing in a 41 percent probability of a Federal Reserve rate increase in December and a 48 percent chance of it happening in January. Investors will also watch tomorrow’s U.S. government report on payrolls.
U.S. stock-index futures were little changed as the Federal Reserve heads into its two-day meeting to decide whether to lift interest rates for the first time since 2006.
Standard & Poor’s 500 Index contracts expiring in December fell 0.1 percent to 1,968.5 as of 10:08 a.m. in London. Futures on the Dow Jones Industrial Average lost 1 point to 16,519.
Even as stock swings whipsawed investors in the past weeks, the S&P 500 has rebounded 5.9 percent since a low last month, closing yesterday at its highest level in more than two weeks.
Equities have been particularly volatile recently. While the Chicago Board Options Exchange Volatility Index has slipped 45 percent from its high last month, it’s still 41 percent above its annual average.
With the S&P 500 trading at 16.7 times its members’ projected earnings, history shows that a Fed rate increase could be bad news for investors banking on a rebound in U.S. corporate earnings. Since World War II, profit growth has fallen by roughly half in the year after a Fed hike, data from Ned Davis Research Group show. Analysts predict S&P 500 earnings will be flat this year, before rising 9.7 percent in 2016.
Among stocks moving in European trading, Fitbit Inc. climbed 3.5 percent as Target Corp. said it will offer its activity trackers to employees.
Sirona Dental Systems Inc. rose 1.4 percent after Dentsply International Inc. agreed to buy it for $ 5.5 billion in stock. Dentsply lost 2.8 percent.
Starz jumped 7 percent after the close of regular New York trading on Tuesday as people familiar with the matter said AMC Networks Inc. is back in talks to acquire the TV programmer.