S&P 500 has best day since June as stocks rally

Stocks rallied on Wall Street Monday, pushing the S&P 500 to its biggest gain in nine months.

The 2.4% jump in the benchmark index followed back-toback weekly losses and came as investors were relieved to see long-term interest rates easing lower in the bond market. Higher interest rates can slow down economic growth and discourage borrowing.

Investors were also watching Washington as a big economic stimulus bill advanced to the Senate.

More than 95% of the stocks in the S&P 500 were higher, with technology, financial and industrial companies among those driving the rally. The Dow Jones Industrial Average was up 665 points, or 2.2%, to 31,600 and the Nasdaq Composite rose 3%.

Smaller company stocks continued to outgain the broader market, a sign that investors are feeling more confident about the economy’s prospects for growth. The Russell 2000 index was up 3.6%.

Much of the focus on Wall Street is on the bond market. The yield on the 10-year Treasury note fell to 1.45% after going as high as 1.5% last week, the highest level in more than a year. Higher interest rates can slow the economy and discourage borrowing, so Wall Street gets jittery when there’s a big surge in rates.

“It moved really fast, the interest rate rise, and now it’s sort of leveling out so people are relieved that it’s not continuing to move up at a really fast pace,” said Tom Martin, senior portfolio manager with Globalt Investments.

Bond yields, which influence interest rates on mortgages and many other kinds of loans, have been climbing much of the year, as investors have bet that vaccination efforts and more government stimulus will lead to strong economic growth this year. However, along with strong growth comes concerns of inflation.