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US stocks reverse in final hour; Dow falls 205 points

August 25, 2015
Specialist Michael O'Mara works on the floor of the New York Stock Exchange, Tuesday, Aug. 25, 2015. U.S. stocks jumped at the open after China's central bank cut interest rates to support its economy. (AP Photo/Richard Drew)

Specialist Michael O’Mara works on the floor of the New York Stock Exchange, Tuesday, Aug. 25, 2015. U.S. stocks jumped at the open after China’s central bank cut interest rates to support its economy. (AP Photo/Richard Drew)

(AP) — U.S. stocks are closing lower Tuesday after falling sharply in the final hour of trading.

Stocks surged early in the day, rebounding from a big sell-off on Monday after the Chinese central bank said it was cutting interest rates to shore up its economy.

However, investor confidence remains fragile after a series of big drops in recent days and the market suffered a dramatic reversal in the final hour of trading.

The Dow Jones industrial average fell 204.78, or 1.3 percent, to 15,666.44 The Standard & Poor’s 500 index dropped 25.60 points, or 1.4 percent, to 1,867.62. The Nasdaq composite dropped 19.76 points, or 0.4 percent, to 4,506.49.

Treasury bonds fell, pushing up the yield on the benchmark 10-year note to 2.09 percent.