WASHINGTON (dpa-AFX) - Following the sell-off seen in the previous week, stocks showed a strong move back to the upside during trading on Monday. The major averages all moved sharply higher over the course of the session.
The major averages pulled back off their highs of the session in afternoon trading but remained firmly positive. The Dow surged 484.18 points or 1.2 percent to 40,829.59, the Nasdaq jumped 193.77 points or 1.2 percent to 16,884.60 and the S&P 500 shot up 62.63 points or 1.2 percent to 5,471.05.
The rally on Wall Street came as traders looked to pick up stocks at somewhat reduced levels following the steep drop seen last week, which dragged the Nasdaq down to its lowest levels in nearly a month.
Optimism the Federal Reserve will lower interest rates later this month has also contributed to the strength on Wall Street despite lingering concerns about the outlook for the U.S. economy.
Meanwhile, traders continue to look ahead to the release of closely watched reports on consumer and producer price inflation later this week.
The reports are expected to show a slowdown by the annual rate of consumer price growth but an acceleration by the annual rate of producer price growth.
While the Fed is almost universally expected to begin lowering interest rates later this month, the data could impact expectations about the pace of rate cuts.
CME Group's FedWatch Tool is currently indicating a 73 percent chance the Fed will lower rates by 25 basis points and a 29 percent chance of a 50 basis point rate cut.
Sector News
Airline stocks saw substantial strength on the day, with the NYSE Arca Airline Index soaring by 2.3 percent to its best closing level in over a month.
JetBlue (JBLU) helped lead the sector higher, spiking by 7.2 percent after Bank of America upgraded its rating on the airline's stock to Neutral from Underperform.
Significant strength was also visible among semiconductor stocks, as reflected by the 2.2 percent jump by the Philadelphia Semiconductor Index. The index rebounded after ending last Friday's trading at a one-month closing low.
Networking, banking and computer hardware stocks also saw notable strength on the day, moving higher along with most of the other major sectors.
Other Markets
In overseas trading, stock markets across the Asia-Pacific region moved mostly lower during trading on Friday. Japan's Nikkei 225 Index fell by 0.5 percent, while China's Shanghai Composite Index slumped by 1.1 percent.
Meanwhile, the major European markets moved to the upside on the day. While the U.K.'s FTSE 100 Index shot up by 1.1 percent, the French CAC 40 Index jumped by 1.0 percent and the German DAX Index advanced by 0.8 percent.
In the bond market, treasuries moved modestly higher over the course of the session after seeing early weakness. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, edged down by 1.3 basis points to 3.697 percent.
Looking Ahead
A lack of major U.S. economic data may lead to relatively light trading on Tuesday ahead of the closely watched inflation data.
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