NEW YORK — Stocks rallied in the U.S. and overseas Monday after last week’s gloomy jobs report led investors to expect that the Federal Reserve will wait longer before making its first interest rate increase since 2008.
Energy stocks rose along with the price of oil, while General Electric pushed industrial stocks higher.
On Monday, the Dow Jones industrial average added 304.06 points, or 1.9 percent, to end the day at 16,776.43. The Standard & Poor’s 500 index rose 35.69 points, or 1.8 percent, to 1,987.05, and the Nasdaq composite index rose 73.49 points, or 1.6 percent, to 4,781.26. It was the fifth straight day of gains for the S&P 500, a reversal of the five consecutive losses for the index right before the rally began.
Monday’s rally was a continuation of a surge that began Friday, when the Labor Department said U.S. employers created only 142,000 jobs in September, far less than expected. Last week’s jobs report is being taken as positive by investors who want the Fed to postpone raising interest rates. The Fed next meets at the end of this month and again in late December. Ultra-low interest rates in place since the 2008 financial crisis have helped drive stock prices higher. Kristina Hooper, head of investment strategies for the U.S. at Allianz Global Investors, pointed to the trading of Fed fund futures, which are securities that bet on which way the Fed will move interest rates. Those futures now indicate that investors expect the most likely timing for the next rate increase is March. Whether the Fed agrees remains to be seen.
Fed officials, including chairwoman Janet Yellen, have said the central bank is looking to start raising rates this year. On Thursday, investors will get the minutes from the Fed’s September meeting, which should provide insight into where Fed policymakers stand.
Monday’s gains were broad. Higher energy prices pushed gains for oil and gas stocks. U.S. crude gained 72 cents to close at $46.26 a barrel in New York. Brent Crude, a benchmark for international oils used by many U.S. refineries, rose $1.12 to close at $49.25 a barrel in London.
The energy sector of the S&P 500 gained 2.9 percent, much more than the rest of the market.
Dow member General Electric rose $1.35, or 5.3 percent, to $26.82 after activist investor Nelson Peltz disclosed he had accumulated a $2.5 billion stake in GE. Peltz is likely to put more pressure on GE’s CEO Jeffrey Immelt to raise the company’s stock price, which has lingered around $25 a share for the past two years.
Alphabet Inc., the new parent company of Google, rose $14.69, or 2.2 percent, to $671.68. Google announced earlier this year that it would reorganize. This would allow investors to see how well Google’s core business was doing, separately from its more experimental ventures such as driverless cars. Monday was the first day the company started trading as Alphabet.
Twitter jumped $1.84, or 7 percent, to $28.15 after the company said it was moving its co-founder Jack Dorsey into the CEO position full time. Dorsey had been interim CEO since June.
U.S. government bond prices fell. The yield on the 10-year Treasury note rose to 2.06 percent from 1.99 percent late Friday.
The dollar rose to 120.43 yen. The euro fell to $1.1188.
Gold edged up $1 to settle at $1,137.60 an ounce, silver rose 45 cents to $15.71 an ounce, and copper increased three cents to $2.36 a pound.
