* Market on track to end six-day losing streak
* Fed’s Dudley says Sept rate hike “less compelling”
* Google gains after Goldman raises rating
* Cameron International soars on Schlumberger deal
* Indexes up: Dow 3.1 pct, S&P 3.04 pct, Nasdaq 3.33 pct (Adds detail on valuations, comment)
By Noel Randewich
Aug 26 (Reuters) - Wall Street rallied more than 3 percent on Wednesday afternoon as fears about China’s economy gave way to bargain hunters emboldened by expectations the U.S. Federal Reserve might not raise interest rates next month.
The surge followed a similar strong rise on Tuesday that collapsed late in the session with many traders unwilling to hold stocks overnight.
In a sign that a faltering Chinese economy and slumping global financial markets could affect U.S. monetary policy, New York Fed President William Dudley said the prospect of a September rate hike seemed “less compelling” than it was just two weeks ago.
All 10 major S&P 500 sectors were up, led by the technology index’s 4.3 percent gain, raising expectations that Wall Street could snap a six-day losing streak that saw the S&P 500 lose 11 percent.
“We’re still in a period of searching,” said Kurt Brunner, a portfolio manager at Swarthmore Group in Philadelphia, Pennsylvania. “You have more people taking advantage of upside. But we’re in for some sloppy trading and I don’t think it’s over today. I don’t think it’s a straight shot up.”
Data earlier on Wednesday appeared to strengthen the case for a rise in interest rates at a Fed policy meeting on Sept 16-17.
Durable goods orders rose 2 percent in July, compared with analysts’ average forecast of a 4 percent fall. Orders for core capital goods, a proxy for business investment, rose 2.2 percent in the biggest gain in 13 months.
The Dow Jones industrial average rose 485.44 points, or 3.1 percent, to 16,151.88, the S&P 500 gained 56.8 points, or 3.04 percent, to 1,924.41 and the Nasdaq Composite added 150.10 points, or 3.33 percent, to 4,656.59.
Apple shares provided the biggest boost to the S&P 500 and Nasdaq composite index, jumping 4.4 percent to $108.33.
Up to Tuesday’s close, the Dow had lost 10.71 percent in the past six trading days and the Nasdaq composite had shed 11.5 percent.
The recent pummeling in U.S. shares has reduced valuations some investors had seen as pricey. The S&P 500’s valuation was down to about 14.8 times expected earnings, compared to around 17 for much of 2015 and below a 15-year average of 15.7, according to Thomson Reuters StarMine data for Tuesday, the most recent available.
The Shanghai Composite Index ended down for the fifth straight day, underscoring fragile confidence and deep doubt over whether the Chinese central bank’s cuts in interest rates and reserve ratios on Tuesday could stabilize the economy.
Google surged 6.02 percent after Goldman Sachs raised its rating to “buy” from “neutral”.
Cameron International soared 40.9 percent after Schlumberger, the world’s No.1 oilfield services company, said it would buy the oilfield equipment maker in a $14.8 billion deal. Schlumberger fell 4.9 percent.
Advancing issues outnumbered decliners on the NYSE by 2,185 to 903. On the Nasdaq, 1,911 issues rose and 905 fell.
The S&P 500 index showed no new 52-week highs and 28 new lows, while the Nasdaq recorded five new highs and 133 new lows. (Editing by Saumyadeb Chakrabarty, additinal reporting by Tanya Agrawal, Sweta Singh; Editing by Meredith Mazzilli)