Wall Street Cheers Lousy Economic Data -- US Commentary
Washington (Oct 5) US stocks rallied Monday amid renewed hopes the Federal Reserve will delay raising interest rates.
Officials have said that it would be approprirate to raise rates in October or December, but recent readings on the US economy could force the Fed to wait until next year.
Today, the Institute for Supply Management released a report showing that growth in the service sector slowed by more than expected.
The ISM said its non-manufacturing index dropped to 56.9 in September from 59.0 in August, although a reading above 50 indicates growth in the service sector. Economists had expected the index to dip to 58.0.
On Friday, a downbeat jobs report showed the US economy generated less than 150,000 jobs in September.
The S&P 500 closed 35.69 points, or 1.8%, higher at 1,987.05, its fifth straight advance.
The Dow Jones Industrial Average jumped 304.06 points, or 1.9%, to 16,776.43. General Electric rose 5.3% while Caterpillar added 5.3%.
The Nasdaq Composite advanced 73.49 points, or 1.6%, to 4,781.26
Resource stocks continued to rise on increased risk appetite. Energy shares are up sharply from a week ago, along with miners and health care stocks.
In overseas trading, stock markets across the Asia-Pacific region moved to the upside during trading on Monday. Japan's Nikkei 225 Index and Hong Kong's Hang Seng Index both surged up by 1.6%, while Australia's All Ordinaries Index jumped by 1.9%.
The major European markets also rallied sharply on the day. While the UK's FTSE 100 Index soared by 2.7%, the French CAC 40 Index and the German DAX Index shot up by 3.3% and 3.5%, respectively.