Energy sector leads the rally as crude jumps
U.S. stocks erased early losses to finish with solid gains on Monday, 06 April 2015 as the Dow industrials registered strong gains. The stock market's switch to rally mode was attributed to bets that the Federal Reserve will move more slowly in raising interest rates given Friday's disappointing jobs report.
The Dow Jones Industrial Average gained 117.61 points, or 0.7%, to close at 17,880.85 after dropping more than 100 points out of the gate. The Nasdaq Composite added 30.38 points, or 0.6%, to finish at 4,917.32. The S&P 500 rose 13.66 points, or 0.7%, to end at 2,080.62, with energy stocks performing best as crude-oil prices jumped.
Last Friday's U.S. jobs report for March showed a much-lower-than-expected rise of 126,000 in the key non-farm payrolls number, which had been expected to come in at up 248,000. Most U.S. markets were closed on Friday for the Good Friday holiday. Thus, much of the market reactions to Friday's jobs report were seen on Monday. Most European markets were closed Monday for the Easter holiday.
The top-weighted technology sector began among the laggards, but finished ahead of most other groups. Large cap names did some heavy lifting with Microsoft jumping 3.1% after Wells Fargo upgraded the stock to 'Outperform' from 'Market Perform.' Also of note, the industrial sector (+0.8%) outperformed even as transport stocks struggled. The Dow Jones Transportation Average lost 0.4% with airlines pacing the decline amid today's increase in oil prices.
There are a growing number of traders and market watchers who believe the U.S. Federal Reserve will not be able to raise interest rates in 2015, due to the lackluster growth of the U.S. economy. Friday's jobs numbers bolsters those notions. A less hawkish Fed U.S. monetary policy has in recent years been a major bullish factor for the gold and silver markets.
The U.S. dollar index traded near steady to start the trading week after dropping sharply Friday in the wake of the employment report. The greenback bulls have faded the past three weeks and there are early technical clues the dollar index has put in a major top. The recent weakness in the U.S. dollar index has also been a bullish underlying element for the precious metals markets.
Bullion prices shot higher on Monday, 06 April 2015 supported by Friday's surprisingly weak jobs report. Major markets were closed on Friday as the U.S. reported a far smaller increase in jobs in March than analysts had expected. Gains in the gold and silver markets were tempered when the U.S. stock indexes rallied sharply on Monday, after being under pressure in early trading.
June gold rose $17.70, or 1.5%, to settle at $1,218.60 an ounce. May silver added 41 cents, or 2.5%, to $17.11 an ounce.
Crude oil futures rebounded sharply on Monday, 06 April 2015 with the U.S. benchmark closing at its highest level in seven weeks on signs of strengthening Asian demand and expectations a preliminary agreement to curb Iran's nuclear program won't see the market immediately swamped with more crude.
On the New York Mercantile Exchange, West Texas Intermediate crude for delivery in May jumped $3, or 6.1%, to close at $52.14 a barrel.
Today's participation was ahead of recent averages with more than 885 million shares changed hands at the NYSE floor.
Tomorrow, the Job Openings and Labor Turnover Survey for February will be released at 10:00 ET while the February Consumer Credit report will cross the wires at 15:00 ET (consensus $12.50 billion).
Later this week, Alcoa will provide the unofficial start of first-quarter earnings season with its report Wednesday after the close.
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