CNBC reports:

U.S. stocks jumped on Thursday, roaring back from a sharp sell-off on Wall Street that saw the S&P 500 and the Dow Jones Industrial Average suffer their worst drop in three months.

The S&P 500 rose 1.9%,while the blue-chip Dow gained 600 points, or 2.0%, boosted by Disney and American Express. The tech-heavy Nasdaq Composite climbed 1.4%.

All 11 S&P 500 traded in the green amid the broad market rally. Financials and materials, cyclical sectors sensitive to an economic recovery, jumped more than 2% each. Tech and communication services also led the strong gains.

The market suffered steep declines in the previous session, with the S&P 500 and the Dow posting their biggest one-day decline since October, as the speculative buying frenzy in heavily shorted stocks kept investors on edge. Some fear that hedge funds being squeezed could be forced to reduce their equity holdings to raise cash. Others called it a sign of a bubble forming in the market.

Full story here.

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