NEW YORK: U.S. stocks posted their biggest one-day advance in more than two weeks, putting the Dow industrials and S&P 500 within 2.3% of their records.
While stocks have been lifted by rising oil prices and the U.S. Federal Reserve’s softer stance on raising interest rates, the rally has slowed after major U.S. indexes rebounded from February lows. Some analysts question whether stocks can climb much higher.
Better-than-expected corporate earnings have helped spur recent gains, and with the reporting season winding down, global economic concerns are likely to determine the next direction of major U.S. indexes.
Data continue “to paint a picture that this is going to be grind-it-out economic growth, as opposed to off-to-the-races economic growth,” said Jim Tierney, chief investment officer for concentrated U.S. growth at AllianceBernstein.
The Dow Jones Industrial Average climbed 117.52 points, or 0.7%, to 17891.16. The S&P 500 gained 16.13 points, or 0.8%, to 2081.43 and the Nasdaq Composite advanced 42.24 points, or 0.9%, to 4817.59.
Consumer discretionary shares were the biggest gainers in the S&P 500, rising 1.4%. Wynn Resorts climbed $5.98, or 6.8%, to $94.28 and Amazon.com rose 24.26, or 3.7%, to 683.85, following a 9.6% increase Friday.
Shares of Apple fell 10 cents, or 0.1%, to 93.64. That marked the eighth consecutive session of losses for the iPhone maker, its longest losing streak since July 1998, according to the WSJ Market Data Group.
Prices for U.S. government bonds fell Monday. The yield on the benchmark 10-year Treasury note was 1.865%, compared with 1.821% on Friday. Yields rise as bond prices fall.
Bond prices declined as a gauge of U.S. factory activity continued to show growth, despite slipping in April. The prices-paid component, a gauge of inflation, rose to 59 from 51.5 in March. That marked the highest level for the indicator since September 2014. Inflation chips away at the value of bonds and is the main threat to long-term Treasury debt.
Many money managers are hesitating to place aggressive bets on long-term Treasury debt, admitting that any rise in the yields would continue to be curtailed by a muddy global growth outlook, highly expansive monetary policy in Japan and the eurozone and the Fed’s very slow campaign in raising interest rates.
“I do not anticipate a big selloff unless inflation surprises on the upside and we have to price in more Fed [rate] hikes,’’ said Gemma Wright-Casparius, senior portfolio manager of the fixed income group at the Vanguard Group, which had more than $2.4 trillion global assets under management at the end of March.
Ms. Wright-Casparius said she expects the yield on the benchmark 10-year Treasury note to trade between 1.5% and 2% in the near term.
Fed-funds futures, used by investors and traders to place bets on central-bank policy, indicated a 15% chance of a rate increase in June, according to data from CME Group.
The odds for a rate increase at the Fed’s December meeting were 66%, suggesting many investors expect the Fed to raise rates once during 2016.
U.S. crude oil prices fell 2.5% to $44.78 a barrel after data showing increased output by the Organization of the Petroleum Exporting Countries reinforced investor concerns about a continuing glut of crude.
