NEW YORK: Wall Street’s major indices closed higher on Monday (Oct 9) while energy stocks rallied as investors digested the latest news about the conflict between Israel and the Palestinian Islamist group Hamas.
The Dow Jones Industrial Average rose 197.07 points, or 0.59%, to 33,604.65. The S&P 500 gained 27.16 points, or 0.63%, at 4,335.66 and the Nasdaq Composite added 52.90 points, or 0.39%, at 13,484.24.
News of the conflict sparked an oil rally due to supply concerns. But stock indices managed to reverse earlier declines with help of more dovish Federal Reserve (Fed) official comments.
As a result investors appeared to refocus on more US-centric matters, John Augustine, said chief investment officer at Huntington National Bank in Columbus, Ohio.
“The stock market and investors are focused on two things, the economy and earnings. The US economy is not slowing and earnings are expected to come out of a recession with reports starting this week,” he said.
“Those fundamentals are more powerful in the market than terrible geopolitical headlines from the weekend just as they were more powerful than a strong jobs report and worries about the Fed on Friday.”
The US bond market was shut on Monday for Columbus Day, also known as Indigenous Peoples' Day.
A recent surge in US Treasury yields had pressured equities. That pressure eased as gains in the iShares Core 10+ years US bond Exchange Traded Fund (ETF) and the iShares 20+ years Treasury bond ETF suggested that yields could fall on Tuesday.
Meanwhile, Fed officials indicated that recent gains in yields on long-term US Treasury bonds, which directly influence financing costs for households and businesses, could steer the Fed from further increases in its short-term policy rate. This eased some concerns among equity investors.
After rising as high as 19.6 during the session, the CBOE volatility index, often referred to as Wall Street’s “fear gauge”, ended at 17.70.
But traditional safe-haven assets remained in demand, with gold climbing 1.6%, although the US dollar index gave up earlier gains and was down 0.18%.
Rising oil prices boosted the S&P energy sector, which ended up 3.5%, making it the biggest gainer among the S&P 500's 11 major industry sectors. – Reuters