NEW YORK (Reuters) – Global stocks slashed their gains on Monday as investors dropped the Italian credit rating despite $ 34 billion buyout from Red Hat Inc. and Standard & Poor's decision , stayed careful.
The Dow Jones Industrial Average (DJI) rose 133.78 points or 0.54 percent to 24,822.09, while the S & P 500.SPX gained 19.91 points, or 0.75 percent, to 2,678.6 and the Nasdaq Composite. IXIC fell 0.56 points or 0.01 percent to 7,166.65.
The Dow had jumped more than 200 points shortly after the opening.
Despite initial gains on Monday, investors remained cautious on a turnaround in risk. Many indices are already in an official correction area as concerns about corporate earnings and global growth have increased.
"Given the volatility of the past week, markets more open to markets today should not be seen as a sea change, but rather as a break to exhale," said Edward Park, Investment Director at Brooks Macdonald.
European equities broadly increased following Standard & Poor's decision to leave the sovereign rating in Italy unchanged, which made it easier to downgrade the ratings.
The MSCI World Equity Index .MIWD00000PUS increased initial gains by 0.4 percent. The index fell 9.3 percent this month and has lost $ 6.7 trillion since its high in January.
Europe's auto industry .SXAP jumped 4.9 percent, the strongest day since August 2015, according to a report that China is considering to halve car purchase fees to boost demand for cars caused by a trade war and a slowdown in economic growth were impaired.
Asian stock trading was dampened by China's blue-chip index, which plummeted by more than 3.3 percent. Chinese data underscored concern about a slowing economy as earnings growth in its industrials eased in September for the fifth consecutive month due to lower sales of raw materials and manufactured goods.
Analysts downgraded their estimates for the fastest-moving European earnings since February 2016, and the weak results from Amazon.com Inc. (AMZN.O) and Alphabet Inc (GOOGL.O) has damaged US stocks late last week.
"I can not summarize the core sentiment among the European investors I've met as something quite grim," wrote Erik Nielsen, chief economist at UniCredit Group, in a note to clients.
Benchmark 10-year notes US10YT = RR fell last 8/32 in the price to yield 3,1056 percent, up from 3,076 percent on Friday late.
Crude oil CLcv1 fell 0.44 percent to $ 67.29 a barrel and Brent LCOcv1 was recently $ 77.50, 0.15 percent a day.
Reporting by David Randall; Arrangement of Susan Thomas