By Victor Reklaitis and Barbara Kollmeyer, MarketWatch
Gold rallies; oil prices also higher
NEW YORK (MarketWatch) -- U.S. stocks erased early losses to
move decidedly higher in Monday trading.
The stock market's upside reversal was pinned on traders bets
that the Federal Reserve will move more slowly in raising interests
rates given Friday's disappointing jobs report, which came out
while the market was closed for Good Friday.
The S&P 500 (SPX) was last up about 12 points, or 0.6%, to
2,078.6, while the Dow Jones Industrial Average (DJI) gained 94.43
points, or 0.5%, to 17,857 after initially dropping more than 100
points. The Nasdaq Composite (RIXF) added 22 points, or 0.5%, to
4,908.
Monday's action came after a drop in Friday's shortened
futures-trading session
(http://www.marketwatch.com/story/us-stock-futures-up-ahead-of-jobs-report-in-holiday-shortened-trade-2015-04-03)
in the wake of the weaker-than-expected jobs report. Payrolls rose
by just 126,000 in March, far undershooting a MarketWatch consensus
estimate of 243,000.
Read: Fed hike in June seems remote after the jobs report
(http://www.marketwatch.com/story/after-weak-jobs-report-a-june-fed-hike-seems-remote-2015-04-03)
To some, the weak report builds a case for the Fed pushing out
an interest-rate hike even further. Such a delay would normally be
read as a positive for stocks, but there are also concerns that
companies are facing difficult conditions to improve profits.
"Earnings are expected to decline for the next two quarters, the
economy might actually have contracted in the first quarter and the
Federal Reserve is set to raise interest rates. A powerful backdrop
for equity prices this is not," said Dan Greenhaus, chief
strategist at BTIG, in a note.
Greenhaus said weak economic reports so far haven't stopped the
bull market, because corporate profits have helped keep stock
prices higher. He said investors will be watching comments from
companies for clues as to whether the market can continue to move
higher.
If companies can show the dollar's rally has been a "temporary
hiccup," and the fall in oil prices is supporting consumer
spending, then investors will "give them a pass. If not, a change
is going to come to this bull market," he said.
Read: Stocks pressured ahead of earnings as job creation weakens
(http://www.marketwatch.com/story/stocks-pressured-ahead-of-earnings-as-job-creation-weakens-2015-04-05)
Alcoa Inc. (AA) will provide the unofficial start of
first-quarter earnings season with its report Wednesday after the
close.
In U.S. economic news on Monday, the latest reading for the
Institute for Supply Management's nonmanufacturing index was
slightly better than expected
(http://www.marketwatch.com/story/ism-services-index-dips-in-march-but-shows-steady-us-growth-2015-04-06),
showing a dip from the prior month but still indicating steady U.S.
growth. In addition, New York Fed President William Dudley said the
stronger dollar and lower oil prices are drags on the eco
(http://www.marketwatch.com/story/feds-dudley-says-strong-dollar-cheap-oil-are-drags-on-us-economy-2015-04-06)nomy
(http://www.marketwatch.com/story/feds-dudley-says-strong-dollar-cheap-oil-are-drags-on-us-economy-2015-04-06),
but he expects growth to pick up after a weak first quarter.
Individual movers:Hudson City Bancorp.(HCBK) was the biggest
decliner among S&P 500 stocks after the company announced a
delay again for its planned merger with M&T Bank Corp.(MTB)
Mattel Inc.(MAT) was the biggest S&P gainer after a B. Riley
analyst upgraded the toy maker to buy
(http://www.marketwatch.com/story/mattels-stock-rallies-as-high-dividend-yield-prompts-analyst-upgrade-2015-04-06)
from neutral, citing an attractive risk-versus-reward scenario.
Read more about Monday's jumpiest stocks in the Movers &
Shakers column
(http://www.marketwatch.com/story/herbalife-sinks-on-reports-of-probe-uniqure-soars-on-bristol-myers-deal-2015-04-06)
Other markets:Gold futures
(http://www.marketwatch.com/story/gold-draws-buyers-as-stocks-drop-2015-04-06)(GCK5)
gained as the dollar weakened. Indeed, the dollar (DXY) slipped
further after falling last week in the wake of the soft jobs
report. In Asia, several markets, including those in China and Hong
Kong, were closed for a holiday, while Japan's Nikkei 225 finished
down 0.2%. European markets are closed until Tuesday.
Meanwhile, May crude oil
(http://www.marketwatch.com/story/oil-rebounds-as-iran-exports-seen-taking-months-to-ramp-up-2015-04-06)(CLK5)
rallied as some analysts said it could take several months before
last week's Iranian nuclear deal spurs more crude supply from that
country.
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