U.S. stocks rebounded Monday morning, with the Dow Jones Industrial Average leaping nearly 200 points after the index recorded its longest losing streak in four years last week. All 10 S&P 500 sectors traded higher, led by a 1.6 percent gain in industrials thanks to billionaire investor Warren Buffett, who inked his biggest acquisition deal ever Monday.
The Dow Jones Industrial Average (INDEXDJX:.DJI) rose 192.55 points, or 1 percent, to 17,567.73. The Standard & Poor's 500 index (INDEXSP:.INX) added 20.13 points, or 0.97 percent, to 2,097.84. And the Nasdaq composite (INDEXNASDAQ:.IXIC) gained 44.37 points, or 0.88 percent, to 5,087.19.
The industrials sector received a boost Monday after Warren Buffett’s investment company Berkshire Hathaway Inc. struck a deal to buy aerospace supplier Precision Castparts Corp. for $37.2 billion, marking the billionaire investor’s biggest deal to date. Following the announcement, shares of Precision Castparts surged 19 percent to $231.25 in morning trading.
Dow component Caterpillar Inc. (NYSE:CAT) led the index higher, gaining more than 3 percent, while aerospace giant Boeing Co. (NYSE:BA) and iPhone maker Apple Inc. (NASDAQ:AAPL) both added more than 2 percent.
With no major economic data scheduled for Monday, investors are looking ahead to a busy week filled with speeches from Federal Reserve policymakers. Investors will analyze the comments for further clues to the timing of the Federal Reserve's inevitable rate hike, which most market professionals anticipate will be announced at the central bank’s next meeting on Sept. 16-17.
Fed Vice Chairman Stanley Fischer said U.S. inflation is temporarily "very low" due to commodity prices, and won’t persist as the economy nears full employment.
“A large part of the current inflation is temporary,” Fischer said in an interview Monday on Bloomberg Television. After the effects of cheaper oil and other raw materials dissipate, “these things will stabilize at some point, so we’re not going to be as low as we are forever.”
Economists are also looking ahead to a speech from Atlanta Federal Reserve President Dennis Lockhart, who is due to speak at 12:25 p.m. EDT Monday. Lockhart said last week it would take a "significant deterioration in the data" to convince him not to hike rates in September, increasing the odds further for an interest rate liftoff at the Federal Reserve’s meeting next month.
Fischer and Lockhart are voting members of the Federal Open Market Committee, the board of policymakers who determine the direction of monetary policy.
Investors are also looking ahead to a series of retail earnings this week, including department stores Macy’s, Kohl’s, Nordstrom and J.C. Penney, along with Chinese e-commerce giant Alibaba Group Holding Ltd.
European stocks turned higher Monday after Greece neared a 86 billion euro ($94 billion) rescue package with its international creditors after both sides agreed on a draft deal over the weekend, Reuters reported. Athens must receive the aid by Aug. 20, when the country faces its next debt payment to the European Central Bank.
The pan-European STOXX 600 pared losses to trade about 0.5 percent higher, while France's CAC 40 and Germany's DAX rose 0.6 percent and 0.8 percent, respectively.
U.S. stocks closed sharply lower Friday, as the Dow Jones Industrial Average extended losses for the seventh straight session, marking its longest losing streak since 2011. The financial markets reacted with mixed emotions to the government’s solid employment report for July, which signaled the Federal Reserve will likely remain on track to raise interest rates as early as September.
Here's the economic calendar for the week of Aug. 10. All listed times are EDT.
No major U.S. economic data scheduled.
- 6 a.m. -- NFIB small business index (July)
- 8:30 a.m. -- Productivity, Unit labor costs (Q2)
- 10 a.m. -- Wholesale inventories (June)
- 10 a.m. -- JOLTS Job openings (June)
- 2 p.m. -- Job openings (July)
- 8:30 a.m. -- Weekly jobless claims
- 8:30 a.m. -- Retail sales (July)
- 8:30 a.m. -- Import price index (July)
- 10 a.m. -- Business inventories (June)
- 8:30 a.m. -- Producer price index (July)
- 9:15 a.m. -- Industrial production; Capacity utilization (July)
- 10 a.m. -- Consumer sentiment (August)