Monday marked the fifth day of gains for S&P 500 - the longest winning streak in 2015
On Monday the S&P 500 rose for a fifth session in a row, its longest winning streak so far this year, as disappointing economic data appeared to push back the timing of a Federal Reserve rate hike to 2016.
Ian Winer, director of equity trading at Wedbush Securities, said that there was a shift in the perception of the location of risk.
“The market decided Friday morning at 10:30 a.m. that pushing a rate rise out and keeping the easy money policies of this central bank was the most important cue on how to invest than the fundamentals of the economy,” he said.
The S&P 500 rose 1.8%, to 1,987.05, with all 10 sectors higher after health-care sector regained ground.
The Dow Jones Industrial Average added 1.9%, to 16,776.43, with only Nike Inc. in the red territory.
The Nasdaq Composite advanced 73.49 points, or 1.6%, at 4,781.26, while the Russell 2000 added 27.52 points or 2.5%, to 1,141.64.
The rally comes against the backdrop of one of the biggest reversals for stocks in four years, when the market, impacted by a weak jobs report, turned steeply positive toward the end of Friday’s close of trading.
The weaker-than-estimated jobs data drove speculation that the Federal Reserve may be more cautious about tightening monetary policy.
Kent Engelke, chief economic strategist at Capitol Securities Management commented that
“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.”
Stocks had slashed some of their gains earlier in the session after the Institute for Supply Management’s non-manufacturing gauge appeared to be lower than expected at its worst readings since June. However, stocks were quick to bounce back.
While many analysts now expect an upside potential as people return to the market, selling pressure is expected to grow as S&P 500 climbs with initial resistance predicted at 2,000 points, says Sal Arnuk, co-head of equity trading at Themis Trading.
Elsewhere, market players were monitoring a sweeping Trans-Pacific Partnership trade agreement - announced Monday morning, - which was directed to lower barriers to goods and services between the U.S. and 11 countries.
