Agencies (Qasioun) - Stocks climbed Monday, pushing the benchmark S&P 500 Index to an all-time high amid renewed optimism in the strength of the world’s largest economy.
The S&P 500 0.5 percent to 2,140, surpassing the prior intraday record set in May 2015. The gains extended a rally from Friday after a better-than-forecast jobs report brightened the economic outlook without fueling expectations that the Federal Reserve will raise interest rates sooner. The Dow rose 115 points, and the Nasdaq added 0.8 percent.
The June payrolls data calmed investor concern sparked by the previous month’s report that showed hiring had slowed to the weakest pace since 2010. The latest figures may reassure policy makers that the economy will continue to expand in the face of weaker profits and Britain’s vote to leave the European Union. The Bank of England and the European Central Bank have assured investors they’ll act to arrest any fallout of Brexit, and a victory for the ruling party in Japan cleared the way for stimulus.
“Momentum is in play here, so as we look to break above new highs, that’ll get people to jump on the bandwagon,” said Matt Maley, an equity strategist in New York at Miller Tabak & Co LLC. “Investors are thinking they have to jump on board before the train leaves the station. The huge amount of uncertainty brought by the Brexit vote will keep the Fed from acting this year, which is helping stocks avoid some selling.”
The S&P 500 advanced 1.5 percent on Friday, rising more than 1 percent for the fourth time in two weeks. The gains restored $1.4 trillion of market value that was erased after the U.K. voted to leave the EU on June 23. Before the payrolls figures, a report Wednesday showed service providers expanded in June at the fastest pace in seven months, and Fed minutes indicated less urgency in the need to raise interest rates.
"Since the jobs report, fears about the U.S. economy and the labor market should have further abated," said Michael Woischneck, who oversees about 300 million euros ($331 million) a senior equities manager at Lampe Asset Management GmbH in Dusseldorf, Germany. “It is all the global players -- the U.S., European Union, Japan -- doing their bit to stabilize the global economy."
Traders price in little chance of an increase in borrowing costs this month and see less than even odds of a hike until at least the end of 2017. Probabilities for a move were as much as 55 percent at the beginning of June.
Even as the latest bout of global anxiety eased, the CBOE Volatility Index edged higher by 2.1 percent to 13.47, after earlier touching a six-week slow. The measure of market turbulence known as the VIX sank 11 percent on Friday, marking the first back-to-back weekly declines since April.
Investors will also turn their attention to earnings with Alcoa Inc.’s report after the markets close on Monday. Analysts predict profit for S&P 500 companies will drop 5.7 percent, which would make it the fifth straight quarterly decline, the longest streak since 2009.
The rally in 2016 has been led by double-digit gains in industries often considered by investors as “defensive” groups. Utility and phone companies are up the most on the year, posting advances of at least 20 percent, with utilities reaching a record last week. In Monday’s trading, six of the S&P 500’s 10 main industries rose, with technology, energy and consumer discretionary companies adding more than 0.5 percent.
Technology shares rose for a fourth day, gaining 0.6 percent to the highest in a month. The group was boosted by semi-conductor companies, including Qorvo Inc. and Skyworks Solutions Inc., which added more than 2.5 percent. The Philadelphia Semiconductor Index climbed 1.2 percent, extending its four-day gain to 5.5 percent.
Twitter Inc. slipped 2.7 percent after its rating was lowered to neutral from buy at SunTrust Robinson Humphrey. The firm said Twitter is “highly unlikely” to be bought this year.
Energy companies in the S&P 500 rose 0.4 percent. Gas-pipeline owner Kinder Morgan Inc. increased 3.2 percent after selling a 50 percent stake in a 7,600-mile network to utility owner Southern Co. for about $1.5 billion. Southern slid 1 percent.
Thomson Reuters Corp. rose 1 percent after agreeing to sell its Intellectual Property & Science division to Onex Corp. and Baring Private Equity Asia for $3.55 billion in cash, shedding the unit to focus on its core financial products.
C&J Energy Services Ltd. dropped 9.3 percent after the company said late Friday it has entered into a restructuring agreement with key creditors.