US stocks jump on shifting Fed expectations; Dow +1.8 per cent

A board shows the Dow Industrial average on the floor of the New York Stock Exchange at the end of the trading day in New York on Monday.
A board shows the Dow Industrial average on the floor of the New York Stock Exchange at the end of the trading day in New York on Monday. PHOTO: EPA

NEW YORK (AFP) - US stocks powered higher on Monday, 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 (1.83 per cent) to 1,987.05, while the tech-rich Nasdaq Composite advanced 73.49 (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 (S$1.42 billion) worth of multi-material fastening systems.

Agricultural equipment maker Deere & Co. jumped 6.3 per cent after announcing a tentative labour agreement with workers representing 10,000 Deere workers at 12 factories in the US.

Microblogging company Twitter advanced 7.0 percent as it announced co-founder Jack Dorsey, who has served as interim chief executive since July 1, would stay as head of the company.

Some other technology stocks also scored big jumps, including Amazon (+2.1 per cent), Cisco Systems (+4.2 per cent), Micron Technology (+10.4 per cent) and Netflix (+4.8 per cent).

Drugmaker Valeant Pharmaceuticals International tumbled 10.3 per cent as it came under renewed fire for its drug-pricing policies with a front-page New York Times article questioning its practices. Democratic lawmakers in Congress have spotlighted the company as a poster child in the campaign against runaway drug prices.

Bond prices fell. The yield on the 10-year US Treasury rose to 2.06 per cent from 1.98 per cent Friday, while the 30-year climbed to 2.90 per cent from 2.82 per cent. Bond prices and yields move inversely.