NEW YORK (AP) — Stocks rose broadly on Monday, recouping some losses from a sell-off last week, as investors tried to look beyond uncertainty about the outlook for interest rates.
The major U.S. indexes dipped into losses in the afternoon on sharp declines for drugmakers. The drop was sparked by a tweet from Democratic presidential front-runner Hillary Rodham Clinton about plans to unveil policy proposals that would stop “price gouging” in the industry. But rising technology and banking shares helped lift the market by the end of the day.
Jack Ablin, chief investment officer at BMO Private Bank, said investors have been rewarded for buying after sell-offs during the current bull market that has run for more than six years, and so they were inclined to buy again.
“Investors who have been buying the dips in recent years have benefited,” he said, “so perhaps they’ll use that strategy until it doesn’t work anymore.”
The Dow Jones industrial average closed up 125.61 points, or 0.8 percent, to 16,510.19.
The Standard & Poor’s 500 index rose 8.94 points, or 0.5 percent, to 1,966.97. Nine of the 10 industry sectors in the index rose. The Nasdaq composite gained 1.73 points, or less than 0.1 percent, to 4,828.95.
Last week’s broad slump last week was triggered by a decision from the Federal Reserve not to raise interest rates. Low borrowing rates have helped stocks triple in price since 2009, and a decision to keep them low normally would encourage investors to buy shares.
But the central bank cited concerns over a global economic slowdown for delaying a hike, and that spooked investors already on edge after weeks of seconding guessing growth in China and the impact of struggling emerging markets with plunging currencies.
Financial stocks rose Monday after comments from Federal Reserve officials over the weekend suggested some still foresee a rate increase as likely this year. Federal Reserve Bank of Atlanta President Dennis Lockhart said on Monday that he was “confident” of a rate rise this year.
Citigroup rose 42 cents, or 0.8 percent, to $50.71. Stocks of financial companies dropped sharply on Friday over fears that lenders would have to hold off increasing borrowing rates on their customers since the Fed had decided to hold off on hiking rates itself.
Biogen, a maker of specialty drugs, was among the big losers after Clinton’s comments on drugmakers. The stock dropped $17.51, or 5.6 percent, to $297.16. Dow members Pfizer, Merck and Johnson & Johnson also fell.
Atmel, a California-based semiconductor company, was one of the day’s big winners. The stock surged after the company accepted an offer worth about $4.6 billion in cash and stock from Britain’s Dialog Semiconductor. Atmel provides electronics products used in the industrial, automotive, consumer, communications, and computing markets. Its stock jumped 92 cents, or 13 percent, to $8.19.
In Europe, stocks stabilized from losses on Friday. Britain’s FTSE 100 index rose 0.1 percent while the CAC-40 in France climbed 1.1 percent. Germany’s DAX rose 0.3 percent.
The price of oil rose on expectations that U.S. production would continue to slip, helping to eventually ease the supply glut. Investors are also betting that a higher price for wholesale gasoline could spur refiners to process more crude. U.S. crude rose $2 to close at $46.68 a barrel in New York. Brent Crude, a benchmark for international oils used by many U.S. refineries, rose $1.45 to close at $48.92 in London.
In metals trading, the price of gold fell $5 to $1,132 an ounce. Silver rose 5.8 cents to $15.22 an ounce and copper was little changed from Friday at $2.39 per pound.
In other futures trading on the NYMEX:
— Wholesale gasoline rose 4.7 cents to close at $1.403 a gallon.
— Heating oil rose 2.3 cents to close at $1.514 a gallon.
— Natural gas fell 4.7 cents to close at $2.605 per 1,000 cubic feet
In government bond trading, prices fell. The yield on the benchmark 10-year Treasury note rose to 2.20 percent from 2.13 percent on Friday.
