Investing.com – Wall Street traded higher on Monday with the S&P 500 hitting new intraday highs and the Dow Jones jumping more than 100 points as investors continued a rally on begun last Friday with an upbeat jobs report.
At 15:46GMT, or 11:46 AMET, the Dow 30 gained 109 points, or 0.60%, the S&P 500 rose 10 points, or 0.48%, while the tech-heavy Nasdaq Composite traded up 37 points, or 0.74%.
The S&P 500 broke through a May 2015 record intraday high to reach 2,141.40 points on Monday. If the benchmark index were to end the session at current levels, that would also mark a record closing high, above the official 2,130.82 points also reached in May of last year.
The new record level was hit as investors continued to buy following last Friday’s spectacular jobs report and were apparently pleased by the news that Prime Minister Shinzo Abe flagged a fresh fiscal stimulus package after his ruling coalition won a landslide victory in the Upper House.
Stateside, market players were gearing up for the unofficial start of the second quarter (Q2) earnings season with Alcoa reporting after the close on Monday.
The earnings recession was expected to continue for a fourth consecutive quarter with S&P Global Market Intelligence forecasting a 5.2% drop in Q2 earnings from S&P 500 companies, while FactSet estimated that company profit will fall by 5.6% and Thomson Reuters projected a 4.7% decline.
Despite the decrease, most experts pointed out that it would be an improvement from the first quarter, suggesting that the trough may already have been reached in the first three months of the year and the recovery could continue.
With no major economic data to be released on Monday, Federal Reserve (Fed) Bank of Kansas City president Esther George’s kicked off what would be a slew of Fed appearances in the run-up to the July 26-27 meeting.
George, the only official to vote against the policy decisions back in March and April, preferring a 25 basis point increase to 0.50%-0.75%, repeated her opinion on Monday that interest rates were too low.
In a much repeated phrase, she said that "keeping rates too low can create risks."
In the June decision ahead of the U.K.’s referendum on its membership in the European Union (EU), George did decide to keep rates steady because of the uncertainty surrounding the possible risks to the U.S. economy stemming from a Brexit.
Cleveland Fed chief Loretta Mester, another known hawk, was also scheduled to give a speech after the U.S. market close in Sydney, Australia.
Even after last Friday’s employment report gave indications of a strong labor environment, markets remained skeptical about the odds of a Fed rate hike this year. Fed fund futures put 100% odds on the fact that the U.S. central bank will hold rates steady at the July 26-27 monetary policy meeting and are currently pricing in just a 33% chance of a hike by December.
In oil markets, though crude managed to turn positive in early morning North American trade, black gold was pressured by demand concerns and increased output.
A Reuters survey of economists showed expectations that the Chinese economy had cooled to a seven-year low in the second quarter.
That was coupled with signs of an ongoing recovery in U.S. drilling activity late Friday as data from oilfield services provider Baker Hughes said that the number of rigs drilling for oil in the U.S. increased by 10 last week to 351, marking the fifth increase in six weeks and underlining worries over a supply glut.
U.S. crude futures lost 0.37% to $45.24 by 15:48GMT, or 11:48AM ET, while Brent oil traded down 0.45% to $46.45.