By Barbara Kollmeyer, MarketWatch

But strategist says watch for 'Bearmageddon'

Stock futures pointed to a Monday rally for Wall Street, continuing action seen late last week, in the week of disappointing U.S. jobs growth as global markets joined in with gains.

Meanwhile, a Federal Reserve official said an interest-rate increase could still happen this year even as the labor-market weakness spurred speculation the U.S. central bank won't hike until 2016.

Extending earlier gains, futures for the Dow industrials rose 112 points, or 0.7%, to 16,490 on Monday, while those for the S&P 500 index added 15.9 points, or 0.8%, to 1,959. Futures for the Nasdaq-100 index rose 34 points, or 0.8%, to 4,295.

The gains followed the sharpest reversal in four years on Friday (http://www.marketwatch.com/story/us-stock-futures-rise-ahead-of-jobs-data-that-could-usher-in-a-rate-increase-2015-10-02) as investors brushed off jobs data that came in surprisingly weak. The S&P 500 index closed up 1.4% to 1,951.36 on Friday, for a gain of 1% for the week, while the Dow industrials surged 200.36 points, or 1.2%, to 16,472.37. The DJIA traded in a 459-point range on Friday, the biggest swing since Oct. 4, 2011.

Read: U.S. stocks rally to end week with gains (http://www.marketwatch.com/story/us-stock-futures-rise-ahead-of-jobs-data-that-could-usher-in-a-rate-increase-2015-10-02)

Asian markets (http://www.marketwatch.com/story/china-stimulus-hopes-push-hong-kong-shares-higher-2015-10-05) picked up the baton from Wall Street. On Monday, the Nikkei 225 index gained 1.6%, while the Hong Kong Hang Seng Index surged 1.6%. In Europe, the Stoxx Europe 600 jumped 2.7%.

Risk appetite returned after Friday's 142,000 September payrolls number (http://www.marketwatch.com/story/us-economy-creates-just-142000-new-jobs-in-september-2015-10-02) fueled the view that an interest-rate hike from the Federal Reserve is off the table for the year. A downgrade from the World Bank for China helped fueled some stimulus hopes for that country (http://www.marketwatch.com/story/china-stimulus-hopes-push-hong-kong-shares-higher-2015-10-05).

Investors were also eyeing a sweeping Trans-Pacific Partnership trade agreement, which was announced Monday morning (http://www.marketwatch.com/story/us-reaches-trade-deal-with-11-pacific-nations-2015-10-05-81032225). The trade deal between the U.S. and 11 countries around the Pacific is expected to lower barriers to goods and services (http://www.marketwatch.com/story/trans-pacific-partnership-trade-deal-nears-agreement-2015-10-05).

Read: U.S. reaches trade deal with 11 Pacific nations (http://www.marketwatch.com/story/us-reaches-trade-deal-with-11-pacific-nations-2015-10-05-81032225)

'Bearamageddon' fears: Still, some strategists doubt U.S. stocks can keep making gains. Michael O'Rourke, chief market strategist at JonesTrading, said in a note that momentum and short covering were likely the only reasons the market rallied on Friday.

"The problem is that absent a change in the fundamental drivers behind the weekend, momentum and short covering only takes the market so far," he wrote. And when the S&P 500 is rallying alongside the dollar index, continued O'Rourke, investors should "question the validity of the move."

Jones said any further deterioration of economic data should put investors on "Bearmageddon watch--looking for indications the economy is rolling over while Fed policy is trapped at the zero bound."

Rosengren says a hike still in play: In an interview with MarketWatch (http://www.marketwatch.com/story/embargoed-until-1201-am-monday-2015-10-05) published Monday, Boston Fed President Eric Rosengren said the September employment report was "weak," but by itself doesn't preclude a rate increase. The central bank will need to see if it was a one-off, or more of a "broader pattern," he said.

"If this is an anomalous report, then, if the data came in sufficiently, I would be comfortable possibly raising rates by the end of the year," said Rosengren.

Read: Poor jobs report puts dark cloud over U.S. economy (http://www.marketwatch.com/story/poor-jobs-report-puts-dark-cloud-over-us-economy-2015-10-04)

The only data of note for Monday is the Institute for Supply Management's nonmanufacturing index for September, which will be released at 10 a.m. Eastern Time.

Stocks to watch: Shares of American Apparel Inc.(APP) were down 24% in thin premarket trading after the company filed for bankruptcy protection on Monday (http://www.marketwatch.com/story/american-apparel-could-file-for-bankruptcy-as-soon-as-monday-2015-10-05). The struggling clothing retailer plans to restructure debt, but wouldn't say whether stores would close.

Activist shareholder Nelson Peltz's Trian Fund Management LP said it has accumulated a $2.5 billion stake (http://www.marketwatch.com/story/activist-firm-trian-takes-25-billion-stake-in-general-electric-2015-10-05) in General Electric Co.(GE), making it one of the company's top shareholders, with around a 1% stake. GE shares were up 4% in premarket trading.

Twitter Inc.(TWTR) has named Jack Dorsey chief executive officer, but says he won't be chairman. Twitter shares rose 2.6%.

Shares of mining and commodities giant Glencore(GLEN.LN) (GLEN.LN) surged as much as 71% in Asia, then added another 10% in Europe amid asset-sale speculation (http://www.marketwatch.com/story/glencore-jumps-ftse-100-gains-for-fourth-day-2015-10-05).

Also read: Glencore oil deals could bite banks (http://www.marketwatch.com/story/glencore-oil-deals-could-bite-banks-2015-10-05)

Alcoa Inc.(AA) will unofficially kick off third-quarter earnings season on Thursday (http://www.marketwatch.com/story/pepsi-alcoa-shift-focus-to-results-as-corporate-earnings-season-begins-2015-10-04). Ahead of that, PepsiCo. Inc.(PEP) will report on Tuesday.

Other markets: The dollar slipped back, which allowed oil prices to rise 57 cents to $46.11. Gold fell. Chinese markets were closed for a holiday.

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(END) Dow Jones Newswires

October 05, 2015 08:23 ET (12:23 GMT)