After opening with a positive gap, U.S. stocks kept moving higher and higher on Monday as buying gathered momentum and finally ended the session on a buoyant note.
The surge was due largely to hectic bargain hunting after recent sharp losses. Data showing the pace of U.S. manufacturing activity to have grown at its slowest pace in 30 months helped ease concerns about aggressive tightening by the Fed.
Investors looked ahead to the upcoming jobs data for September, due out later in the week.
The major averages all ended sharply higher. The Dow surged 765.38 points or 2.66 percent to settle at 29,490.89, recording its best single session gain in over seven months. The S&P 500 climbed 92.81 points or 2.59 percent to 3,678.43, while the Nasdaq advanced 239.82 points or 2.27 percent to 10,815.43.
A report from the Institute for Supply Management showed activity in the U.S. manufacturing sector slowed by more than expected in the month of September but still saw continued growth.
The ISM said its manufacturing PMI fell to 50.9 in September from 52.8 in August, although a reading above 50 still indicates growth in the sector. Economists had expected the index to edge down to 52.2.
With the bigger than expected decrease, the manufacturing PMI dropped to its lowest level since hitting 43.5 in May 2020.
A report released by the Commerce Department showed construction spending in the U.S. fell by 0.7 percent to an annual rate of $1.781 trillion in August after sliding by 0.6 percent to a revised rate of $1.794 trillion in July.
Economists had expected construction spending to dip by 0.3 percent compared to the 0.4 percent drop originally reported for the previous month.
The bigger than expected decrease in total construction spending came as spending on private construction decline by 0.6 percent to an annual rate of $1.426 trillion.
Chevron, Intel, Caterpillar, Boeing, American Express, Honeywell International, Microsoft, Walgreens Boots Alliance, Cisco Systems, Apple, Verison and JP Morgan Chase climbed 3 to 6 percent.
Several other stocks including Nike, Walt Disney, Salesforce.com, Travelers Companies, Goldman Sachs, IBM, Visa and Walmart also ended sharply higher.
Tesla plunged more than 8 percent after the company’s vehicle deliveries fell short of estimates. Tesla delivered a record 343,830 cars worldwide in the third quarter. However, analysts had expected the company to ship nearly 358,000 vehicles in the quarter.
In overseas trading, stock markets across the Asia-Pacific region turned in a mixed performance amid light holiday trading. Japan’s Nikkei 225 Index jumped by 1.1 percent, while Hong Kong’s Hang Seng Index slid by 0.8 percent.
The major European markets closed higher as stocks saw some strong buying in the final hour. The pan European Stoxx 600 climbed 0.77 percent. The U.K.’s FTSE 100 gained 0.22 percent, Germany’s DAX surged 0.79 percent and France’s CAC 40 gained 0.55 percent.
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