LONDON: US stocks powered higher on Monday (Oct 5), joining European equities in rallying on confidence that the Federal Reserve will delay hiking interest rates in light of some poor economic data.
The Dow Jones Industrial rose 304.06 points (1.85 per cent) to 16,776.43. The broad-based S&P 500 climbed 35.69 points (1.83 per cent) to 1,987.05, while the tech-rich Nasdaq Composite advanced 73.49 points (1.56 per cent) to 4,781.26.
Friday’s poor US jobs report convinced many Fed watchers that the US central bank will delay a plan to lift interest rates until December at the soonest.
“A few days ago, people were very worried that the Fed would engage in a policy mistake and hike rates,” said Alan Skrainka, chief investment officer at Cornerstone Wealth Management. “Today, they’re feeling a little better that that’s not going to happen.”
General Electric helped lead the Dow, jumping 5.3 per cent on news that activist investor Nelson Peltz’s Trian Fund Management took a one percent stake in the industrial conglomerate.
Other industrials in the Dow also scored big gains, including Caterpillar (+5.3 per cent), Chevron (+3.0 per cent), DuPont (+4.1 per cent) and United Technologies (+2.8 per cent).
Alcoa soared 9.4 per cent on news it signed a deal with Airbus to supply about US$1 billion worth of multi-material fastening systems.
Agricultural equipment maker Deere & Co. jumped 6.3 per cent after announcing a tentative labor agreement with workers representing 10,000 Deere workers at 12 factories in the US.
Microblogging company Twitter advanced 7.0 per cent as it announced co-founder Jack Dorsey, who has served as interim chief executive since Jul 1, would stay as head of the company.
