The S&P 500 on Monday rose for a fifth session in a row, its longest a hit streak this 12 months, as a string of industry data perceived to keep off the timing of a Federal Reserve worth hike to 2016.
“I may classify at the moment—and the reversal closing Friday—as a metamorphosis throughout the perception of the positioning of chance,” said Ian Winer, director of equity shopping for and promoting at Wedbush Securities.
“The market determined Friday morning at 10:30 a.m. that pushing a cost upward thrust out and retaining the straightforward money insurance coverage insurance policies of this important monetary establishment used to be as soon as an awfully highly effective cue on make investments than the fundamentals of the monetary gadget,” he mentioned.
The S&P 500
rose 35.69 points, or 1.8%, to 1,987.05, with all 10 sectors higher after health-care sector rebounded.
The rally comes on the heels of one of the biggest reversals for stocks in four years, when the market swooning from a weak jobs report turned sharply positive toward the end of Friday’s close of trading.
The weaker-than-projected jobs report fueled speculation that the Federal Reserve may be more circumspect about tightening monetary policy.
“It is a case where bad [news] is good,” said Kent Engelke, chief economic strategist at Capitol Securities Management. “Friday’s jobs data was bad and the odds are rising that any change in monetary policy will not occur until 2016 with consensus now expecting March.”
Indeed, the Fed-funds futures market on Monday was pricing in a 7% probability of a rate increase in October, down from 14% Thursday before the weak jobs report, according to the CME Group’s FedWatch tool.
Stocks had trimmed some of their gains earlier in the session after the Institute for Supply Management’s nonmanufacturing index, a measure of the services side of the economy, came in lower than expected at its lowest readings since June. But stocks bounced back quickly.
John Manley, chief equity strategist at Wells Fargo Advantage Funds, was cautiously optimistic about the market in the near term, and projected more upside potential as people return to the market.
Engelke was a bit more specific. “There is a 65% chance that the market has turned the proverbial corner,” he said.