By Geoffrey Smith
Investing.com -- U.S. stock markets opened higher on Tuesday, rebounding from their worst day in months on Monday as nerves about the Chinese real estate debt crisis eased.
Better-than-expected data from the housing market also supported sentiment. Housing starts and building permits for August both came in above expectations, albeit not by enough to cause any acceleration in the Federal Reserve's timeline for running down its asset purchases or raising interest rates. The Fed's latest two-day policy meeting starts later Tuesday.
By 9:45 AM ET (1345 GMT), the Dow Jones Industrial Average was up 232 points, or 0.7%, at 34,202 points. The S&P 500 was up 0.5% and the Nasdaq Composite was up 0.6%.
China Evergrande Group's (OTC:EGRNY)'s looming default - it has already skipped payments to banking creditors - continues to occupy minds, with many mindful of the fact that it could become the second-biggest bankruptcy in history, after Lehman Brothers' collapse in 2008.
Wall Street analysts - who hardly distinguished themselves ahead of that fiasco - have been playing down the risk of a systemic financial crisis in China, pointing to the still-extensive range of options available to Beijing.
"We do not see the Evergrande crisis as China's Lehman moment", analysts at Citigroup (NYSE:C) wrote, because policymakers will likely prevent systematic risk "to buy time for resolving the debt, and push forward marginal easing for the overall credit environment."
Mainland Chinese stock markets reopen after a long holiday weekend on Wednesday, and most analysts expect an announcement of at least some measures before then.
Uber (NYSE:UBER) stock stood out in early dealings, rising 7.6% after a securities filing in which the company said it expects to make a profit at the level of adjusted EBITDA - its preferred metric - in the current quarter, thanks to a rebound in its ride-hailing business and sustained strength in food delivery. It had previously said that its first profit might have to wait until the final quarter of 2021 or even later. Lyft (NASDAQ:LYFT) stock rose 2.8% in sympathy.
Elsewhere, Quantumscape (NYSE:QS) stock emerged from a five-month coma, rising 16% after the company said it had signed an agreement with another 'top 10' automaker, which it said had "committed to collaborate with the Company to evaluate prototypes of the Company’s solid-state battery cells, and to purchase 10 (megawatt-hours) of capacity from the Company’s pre-pilot production line facility."
Quantumscape's claims that it was closing in on a breakthrough in so-called 'solid-state' battery technology, promising a game-changing increase in the power of electric vehicle batteries, came under a harsh spotlight earlier in the year, after short-seller Scorpion Capital published an investigation into its alleged shortcomings. That caused the stock of the Volkswagen-backed company to fall over 90% from its peak.
Vaccine makers were also in demand, with BioNTech (NASDAQ:BNTX) rising 1.5% and Moderna (NASDAQ:MRNA) stock rising 1.2%, while Johnson & Johnson (NYSE:JNJ) stock rose 0.6% after it said its single-shot vaccine demonstrated much higher effectiveness with a booster shot after several weeks.