Stocks moved sharply higher over the course of the trading session on Monday, regaining ground following the steep drop seen last week. The major averages all showed strong moves to the upside on the day.
The major averages saw continued strength going into the close, ending the session at their best levels of the day. The Dow surged 528.58 points or 1.6 percent to 34,005.04, the Nasdaq jumped 139.12 points or 1.3 percent to 11,143.74 and the S&P 500 shot up 56.18 points or 1.4 percent to 3,990.56.
The rally on Wall Street came as traders picked up stocks at somewhat reduced levels following the notable decline seen in the previous week.
Last week, the Dow tumbled by 2.8 percent, ending last Friday’s trading at its lowest closing level in a month, while the S&P 500 and the Nasdaq plunged by 3.4 percent and 4.0 percent, respectively.
Positive sentiment was also generated in reaction to a survey from the New York Federal Reserve showing inflation expectations decreased at the short, medium, and longer terms in November.
The New York Fed’s Survey of Consumer Expectations showed median one-, three-, and five-year-ahead inflation expectations decreased to 5.2 percent, 3.0 percent, and 2.3 percent, respectively.
Meanwhile, traders continued to look ahead to the Federal Reserve’s highly anticipated monetary policy decision on Wednesday.
While the Fed is widely expected to slow the pace of interest rate hikes to 50 basis points, traders have recently expressed concerns about how much further the Fed will need to raise rates in order to contain inflation.
Traders are likely to pay close attention to the Fed’s accompanying statement, although a lot of key data will be released before the next meeting in late January/early February.
Sector News
Energy stocks turned in some of the market’s best performances on the day, benefiting from a significant rebound by the price of crude oil.
With crude for January delivery surging $2.15 to $73.17 a barrel, the Philadelphia Oil Service Index soared by 4.1 percent and the NYSE Arca Oil Index jumped by 2.7 percent.
Substantial strength was also visible among transportation stocks, as reflected by the 3.0 percent surge by the Dow Jones Transportation Average.
Computer hardware, semiconductor and utilities stocks also showed strong moves to the upside, while tobacco stocks were among the few groups to buck the uptrend.
