By Sara Sjolin and Mark DeCambre, MarketWatch
U.S. stocks marched out of the gate with a full head of steam to
post sharp gains Monday, buoyed by a Warren Buffett-backed merger
and dovish remarks from a Federal Reserve official that suggest a
September interest-rate hike may not be a fait accompli.
The main indexes have been weighed by worries about the prospect
of U.S. monetary policy tightening sooner than later even as
worries about the health of the economy persist.
But comments from Federal Reserve Vice Chairman Stanley Fischer
on Monday may have helped ease some of those concerns. He told
Bloomberg TV he doesn't expect the first interest-rate hike by the
U.S. central bank in more than nine years to occur until after
inflation returns
(http://www.marketwatch.com/story/no-rate-hike-until-fed-sees-inflation-returning-to-normal-fischer-2015-08-10)
closer to the Fed's target of around 2%.
A $32 billion acquisition of mechanical-parts maker Precision
Castparts
(http://www.marketwatch.com/story/berkshire-hathaway-to-buy-precision-castparts-for-32-billion-2015-08-10)
Corp. (PCP) by Warren Buffett's Berkshire Hathaway (BRKA)(BRKA), at
a 20% premium to the company's Friday closing price, also provided
a boost.
The Dow Jones Industrial Average was up 173 points, around 1%
higher, to 17,546.45. All 30 of the blue-chip indexes components
were in positive territory, led by Boeing Co. (BA), up 2.4% in
early trade, as the Dow attempts to snap a seven-session losing
streak, its worst since 2011's debt ceiling crisis
(http://www.marketwatch.com/story/us-stock-futures-flat-as-traders-dont-dare-to-move-before-jobs-data-2015-08-07).
Meanwhile, S&P 500 was up 20 points, or nearly 1%, to 2,097.
All 10 of the S&P's sectors were higher, with industrials, up
1.7%, and consumer discretionary, nearly 1% higher, leading the
charge. The tech-laden Nasdaq Composite Index were 56 points, or
1.1% up, at 5,099.
On Friday, the main indexes closed lower after the jobs report
matched economists estimates, giving investors little reason to
believe that a rate hike would be derailed.
"There was enough encouragement in the detail of the [jobs]
report to suggest that the U.S. labor market is gradually
improving. Hours worked pushed higher, and full-time employment
improved, which should be enough to keep [Fed Chairwoman] Janet
Yellen on track for a first Fed rate hike in September," said
Rebecca O'Keeffe, head of investment at stockbroker Interactive
Investor, in a note on Monday.
There are no major data releases on tap on Monday, but Atlanta
Fed President Dennis Lockhart will give a speech to the Atlanta
Press Club at 12:25 p.m. Eastern Time. Last week, Lockhart
suggested that Fed policy makers are prepared to raise the
Fed-funds rate in September
(http://www.marketwatch.com/story/dollar-weakens-against-commodity-linked-rivals-as-oil-rebounds-2015-08-04).
Other markets: In Asia, China's Shanghai Composite Index rallied
4.9% for its biggest one-day gain in a month
(http://www.marketwatch.com/storyno-meta-for-guid) on expectations
Beijing will maintain its market support.
European markets were mixed, as resource firms fell after a
round of downbeat data from China
(http://www.marketwatch.com/story/chinas-economy-enters-second-half-of-2015-on-weak-note-2015-08-09)--a
major user of raw materials.
Oil prices (http://www.marketwatch.com/storyno-meta-for-guid)
wavered, attempting a rebound from last week's losses
(http://www.marketwatch.com/story/oil-gains-but-still-on-pace-for-hefty-weekly-drop-2015-08-07),
when futures slumped 6.9% to the lowest settlement level since
March. Metals prices were mostly higher, while the dollar rose
against most other major currencies.
Earnings: Reporting ahead of the opening bell, Dean Foods
Co.(DF) is forecast to report second-quarter earnings of 26 cents a
share, according to analysts surveyed by FactSet. The milk
processor unexpectedly said late Friday that Chairman Tom C. Davis
has resigned.
It gets busier after the bell, with Kraft Heinz Co.(KHC), burger
chain Shake Shack Inc.(SHAK) and videogame company Take-Two
Interactive Software Inc.(TTWO) on the earnings docket.
Movers & shakers:Berkshire Hathaway Inc.(BRKA) (BRKA) said
it is buying Precision Castparts Corp
(http://www.marketwatch.com/story/berkshire-hathaway-nears-deal-to-buy-precision-castparts-2015-08-08-12103303).(PCP),
in what could be Berkshire's largest takeover ever. Precision
Castparts shares were up nearly 30% in premarket trade Monday.
B-shares of Warren Buffett's investment vehicle fell 0.7% in
premarket trade on Monday after the conglomerate late Friday
reported its second-quarter profit fell to $4.01 billion
(http://www.marketwatch.com/story/berkshire-hathaway-operating-income-drops-10-2015-08-07-174853111),
or $2,442 per Class A share, from $6.4 billion, or $3,889 a share,
a year earlier.
(http://www.marketwatch.com/story/berkshire-hathaway-nears-deal-to-buy-precision-castparts-2015-08-08-12103303)
Apple Inc.(AAPL) inched 0.6% higher premarket. The tech major is
expected to host a special event in the week of Sept. 7
(http://www.marketwatch.com/story/apple-expected-to-host-iphone-apple-tv-event-on-sept-9-report-2015-08-07)
to unveil its latest iPhone and Apple TV.
U.S.-listed shares of Alibaba Group Holding Ltd.(BABA) rose 1.5%
after the Chinese e-commerce giant said it would invest more than
28 billion yuan ($4.63 billion) for a nearly 20% stake in Suning
Commerce Group Ltd.(002024.SZ).
Also read:Warren Buffett's favorite indicator shows it's time to
unload stocks, buy bonds
(http://www.marketwatch.com/story/warren-buffetts-favorite-indicator-shows-its-time-to-unload-stocks-buy-bonds-2015-08-10)
(http://www.marketwatch.com/story/warren-buffetts-favorite-indicator-shows-its-time-to-unload-stocks-buy-bonds-2015-08-10).