Stocks soar as T-yields decline
Stocks jumped Monday, with gains again accelerating in the last hour of trading, as markets around the world continue to claw back from a sharp tumble this month.
The Standard & Poor’s 500 index powered to a third straight gain, and the index has erased about two-thirds of its 10% loss since setting a record a month ago.
Analysts said the key reason for Monday’s gain was a drop in Treasury yields, which have been at the center of worries for stock investors in recent weeks, but some were still surprised by how much the stock market climbed. The S&P 500 gained 32.30 points, or 1.2%, to 2,779.60, with telecoms and technology stocks leading the way. For the second straight day, the market turned higher as the day wore on. That’s an encouraging sign to investors who see the last hour of trading as being dominated by the “smart money.”
The Dow Jones industrial average rose 399.28, or 1.6%, to 25,709.27, and the Nasdaq composite gained 84.07, or 1.1%, to 7,421.46. All three indexes are back within 3.4% of their record highs.
“I think you can very confidently say the worst is over for now,” said Randy Frederick, vice president of trading and derivatives at the Schwab Center for Financial Research. “The concern I have is that it’s recovering too quickly.”
Frederick said he saw few reasons for a big move higher in stocks Monday, with no big-ticket earnings or economic reports on the calendar. If the market continues rising at this rate, it could hit record heights again in the next couple weeks. “And then we’d be vulnerable to another correction,” Frederick said.
The yield on the 10-year Treasury note slipped to 2.86% from 2.87% on Friday. The 30-year yield, which is influenced more by expectations for inflation, fell to 3.15% from 3.16%.
In Europe, France’s CAC 40 rose 0.5%, and Germany’s DAX gained 0.3%. The FTSE 100 rose 0.6%. In Asia, Japan’s Nikkei 225 index rose 1.2%, and the South Korean Kospi added 0.3%. China’s Shanghai composite jumped 1.2%.
Benchmark U.S. crude oil rose 36 cents to $63.91 per barrel. Brent crude gained 19 cents to $67.50 a barrel.
Natural gas rose 1 cent to $2.64 per 1,000 cubic feet, heating oil added 2 cents to $1.99 per gallon and wholesale gasoline gained 2 cents to $1.83 per gallon.
Gold added $2.50 to settle at $1,332.80 per ounce, silver rose 7 cents to $16.55 per ounce and copper fell 1 cent to $3.22 per pound.
The dollar inched up to 106.91 Japanese yen from 106.75 yen late Friday. The euro rose to $1.2312 from $1.2295, and the British pound edged up to $1.3968 from $1.3967.