By Wallace Witkowski and Mark DeCambre, MarketWatch
U.S. stocks moved sharply higher and kept testing new intraday
highs Monday, buoyed by remarks from one Federal Reserve official
suggesting a September interest-rate hike may not be a done deal as
well as a bounce-back in Chinese stocks.
The main U.S. indexes have been weighed by worries about the
prospect a slowdown in Asia as well as impending tightening of U.S.
monetary policy.
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%. The inflation rate has
dipped close to zero in recent months and hasn't been above 2%
since April 2012
(http://www.marketwatch.com/story/feds-fischer-suggests-september-rate-hike-not-a-done-deal-2015-08-10).
Still stocks didn't waver even after Atlanta Fed president
Dennis Lockhart, who last week supported a September rate hike
(http://www.wsj.com/articles/atlanta-feds-lockhart-fed-is-close-to-being-ready-to-raise-short-term-rates-1438709252),
said Monday the economy is strong enough can handle a gradual rise
in interest rates
(http://www.marketwatch.com/story/feds-lockhart-economy-can-handle-gradually-higher-interest-rates-2015-08-10).
The Dow Jones Industrial Average was up 228 points, around 1.3%
higher, to 17,602. Twenty-nine out of 30 of the blue-chip index
components were in positive territory, led by Apple Inc.(AAPL), up
3.5%, Caterpillar Inc.(CAT), up 3.5%, and as the Dow looked 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).
The S&P 500 jumped nearly 26 points, or 1.2%, to 2,103. All
of the S&P's sectors except utilities were higher. The
tech-laden Nasdaq Composite Index was up 60 points, or 1.2%, at
5,104.
China's stock market jumped overnight, perhaps assuaging some
concerns that the country's stock market is running out of
steam.
"China has been the No. 1 concern in the market and if the
market believes that China's not coming apart at the seams, then
we're going to see a nice bounce," said Tobias Levkovich, chief
equity strategist at Citigroup.
China's Shanghai Composite Index leapt 4.5% 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.
Monday's moves mean the U.S. benchmarks could snap a
seven-session losing streak.
BTIG's Dan Greenhaus said there's lots of stock picking among
recent losers, as evidenced in Monday's best performing sectors,
energy and materials, which are both up more than 2% on the
session. For the quarter to date, those sectors have been, and
remain, the worst performers on the S&P 500, with energy down
8.8%, and materials down 4.4%.
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.
Read: Yellen's razzle-dazzle new indicator ignored -- even by
Yellen
(http://www.marketwatch.com/story/yellens-razzle-dazzle-new-indicator-ignored-even-by-yellen-2015-08-10)
Other markets: 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)
rose, 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 slipped
against most other major currencies.
Earnings:Dean Foods Co.(DF) shares slumped 6% after the company
reported quarterly results Monday
(http://www.marketwatch.com/story/dean-foods-swings-to-profit-beats-expectations-2015-08-10).
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 slipped 0.1%
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.
Read:These are Warren Buffett's 10 biggest deals
(http://www.marketwatch.com/story/these-are-warren-buffetts-10-biggest-deals-2015-08-10)
Apple Inc.(AAPL) shares jumped more than 3%. 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 1.8%
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).