Wall Street Starts Week Strongly

By on September 27, 2015


Wall Street stocks were exponentially higher on Monday, recovering from some of its big losses last week when the Federal Reserve’s decision to keep interest rates near zero raised concerns about the health of the global economy. All 3 major indexes were up about 1 percent, with technology and financial stocks leading the way.

Investors will be looking for clues on when the Federal Reserve may finally raise rates when a number of central bank officials, including Chair Janet Yellen, appear in public this week.

Federal Reserve Bank of Atlanta President Dennis Lockhart, a voting member of the Fed’s policy-making committee, will be available to media later this week.

Fears of slowing growth in China sparked a sharp selloff in global stock markets in recent weeks and the Fed’s comments about the global economy exacerbated those concerns.

Some investors said that despite weakening global growth the U.S. economy remained in good shape, with unemployment at a multi-year low and stronger-than-expected GDP growth.

“The uncertainty is geared towards the global economy and not the U.S. economy,” said Brad McMillan, chief investment officer for Commonwealth Financial in Waltham, Massachusetts. “As far as the domestic economy is concerned, continuing low rates is good news.”

Investors are now focusing on the next Fed meeting on Oct. 27-28, though a growing number of economists now wonder whether the Fed will raise rates at all this year.

Adding to the positive sentiment, oil prices rose by more than 2 percent on Monday after data showed U.S. drilling slowed. Exxon’s shares were up nearly 1 percent.

At 11:00 a.m. ET (1500 GMT) the Dow Jones industrial average was up 175.62 points, or 1.07 percent, at 16,560.2, the S&P 500 was up 19.26 points, or 0.98 percent, at 1,977.29 and the Nasdaq Composite was up 46.03 points, or 0.95 percent, at 4,873.25.

All 10 major S&P sectors were higher. Apple’s 1.1 percent rise gave the biggest boost to the S&P 500 and the Nasdaq. Data on Monday showed that U.S. home resales fell more than expected in August. Analysts say the decline might be due to rising prices shutting out potential buyers.

Shares of GoPro were down 5.5 percent at $33.22 after Barron’s said the video camera maker’s shares could plunge to $25 as its latest product launch underwhelmed customers amid increasing competition.

Chipmaker Atmel jumped 15.6 percent to $8.40, a day after Dialog Semiconductor said it agreed to buy the company for about $4.6 billion. Advancing issues outnumbered decliners on the NYSE by 2,217 to 661. On the Nasdaq, 1,785 issues rose and 870.

The S&P 500 index showed three new 52-week highs and eight new lows, while the Nasdaq recorded 29 new highs and 28 new lows.