It was a day for picking up bargains as buyers shot the Dow way up another 293 points for a nearly 2% gain wiping out much of yesterday's 3% loss.  Today's columnist is calling the week's volatility the new norm, not a recovery but rather the acceptance of a new nervous environment.  I quite disagree.  This volatile market in which we find ourselves is not a new norm but an old norm that has existed for several years now.  Let the global economies settle down and the Fed slowly begin raising interest rates and we will then see a new normal that has not been part of our reality since before the Great Recession.  Until then, every little telltale sign of gloom will be met with fierce and panicky overselling followed quickly by cooler heads picking up profits.

The next challenge is for the Fed to actually set an actual time table for the hike, weighing the counter forces of U.S. labor demand with international anxieties over China's economy, a debate that may likely come as soon as September 16th when the Fed again meets.  With today's gains we are once again out of correction territory with the volatility index appropriately dropping 11% in the bargain.  That's the way it's been.  In a big sell off, we enter correction, during these buying sprees we leave it again.  With today's surge, the S&P is now valued handsomely at 15.1 times earnings, quite an improvement over the 17 it has hovered at most of the year.  But lest we congratulate ourselves too soon, volume was light at a mere 6.7 billion, way below the 9.1 billion of the past week.  It seems all the senior brokers really are on vacation.  So don't blame volatility.  Blame the Hamptons.

Markets | Wed Sep 2, 2015 4:23pm EDT

Wall Street surges as turbulence becomes the norm

BY NOEL RANDEWICH

DJ:   16,351.38  +293.03     NAS:   4,749.98  +113.87      S&P:      1,948.86  +35.01

 (Reuters)  Wall Street stocks jumped almost 2 percent on Wednesday in the latest volatile session as investors weighed the impact of a stumbling Chinese economy and global market turmoil on the Federal Reserve's impending decision about when to raise interest rates.

U.S. investors have weathered over two weeks of unusually wide-swinging trade that has left the S&P 500 with its worst monthly drop in three years and a loss of 8.5 percent from an all-time high in May.

“What we're seeing today is not a recovery. It's market volatility, it's nervousness, it's an inability to call the direction of the market," said Jake Dollarhide, chief executive officer of Longbow Asset Management in Tulsa, Oklahoma.

"Through now and October we're going to see a lot more of this, a lot of volatility.”

U.S. labor markets were tight enough to fuel small wage gains in some professions in recent weeks, though some companies already felt a chill from an economic slowdown in China, the Fed said.

The combination of more demand for workers and worries about Chinese economic growth underscores the challenge faced by the Fed at a Sept 16-17 meeting where it may decide to raise interest rates for the first time since 2006.

The Dow Jones industrial average .DJI jumped 1.82 percent to end at 16,351.31 points.  The S&P 500 .SPX climbed 1.83 percent to 1,948.85 and the Nasdaq Composite .IXICsurged 2.46 percent to 4,749.98.

The CBOE Volatility index .VIX, Wall Street's "fear gauge," dipped 11 percent but stayed in territory not seen since 2011 after Standard & Poor's cut its credit rating on the United States for the first time.

The recent turbulence has left the S&P 500's valuation at 15.1 times expected earnings, inexpensive compared to around 17 for much of 2015, according to Thomson Reuters StarMine data. But investors fear that the outlook for earnings may darken as China'seconomy loses steam.

Concerns about China's economy pushed major U.S. indexes down almost 3 percent on Tuesday and intensified fears of a long-term selloff.

On Wednesday, all of the 10 major S&P sectors were higher, led by the technology index's .SPLRCT 2.6 percent rise, helped by Apple (AAPL.O), up 4.29 percent, and Microsoft (MSFT.O), up 3.68 percent.

Shares of banks and bond insurers rose after Puerto Rico's indebted public utility PREPA reached a deal with a key bondholder group.

OFG Bancorp (OFG.N) surged 19.59 percent and First Bancorp (FBP.N) rose 9.81 percent.

Ambarella (AMBA.O) slid 8.51 percent after the chipmaker's third-quarter revenue forecast failed to impress investors. Key-customer GoPro (GPRO.O) fell 5.52 percent after Raymond James said Ambarella's forecast likely means GoPro will not launch more products this year.

Advancing issues outnumbered declining ones on the NYSE by 2,256 to 793; on the Nasdaq, 1,967 issues rose and 875 fell.

The S&P posted 1 new 52-week high and 10 new lows; the Nasdaq Composite racked up 20 new highs and 52 new lows.

Volume was lighter than in recent days. About 6.7 billion shares traded on U.S. exchanges, compared to an average of 9.1 billion in the past five sessions, according to BATS Global Markets.