Wall Street resumed its rally on Monday, led by natural resources and tech shares as investors saw stocks regaining momentum lost late last week.
A share-buyback from Dow component Intel helped revive optimism, which has been reinforced by more strong profit reports. Three-quarters of the 84 S&P 500 companies that have reported results so far in this earnings season have beaten analysts' estimates.
Strong earnings are what's pushing the market higher and I don't see a correction in sight until the (earnings) season is over, said Keith Springer, president of Springer Financial Advisors in Sacramento, California.
Even after the earnings, I don't think we will see a major correction but rather a pause or a breather since there isn't a major fundamental issue.
Volatility indicators in the options market also suggested a turnaround after the S&P's decline last week when the benchmark index fell after seven straight weeks of gains.
But trading volume was the lowest of the year at 7.02 billion shares traded on the New York Stock Exchange, the American Stock Exchange and Nasdaq. Last year's estimated daily average was 8.47 billion shares.
On Monday the Dow Jones industrial average <.DJI> ended up 108.68 points, or 0.92 percent, at 11,980.52. The Standard & Poor's 500 Index <.SPX> was up 7.49 points, or 0.58 percent, at 1,290.84. The Nasdaq Composite Index <.IXIC> was up 28.01 points, or 1.04 percent, at 2,717.55.
The blue-chip Dow neared the psychologically
important 12,000, pulled higher by natural resources stocks like Alcoa while the Nasdaq gained more than 1 percent on large-cap tech shares.
Shares of Alcoa Inc
The S&P materials sector <.GSPM> advanced 1 percent. Copper prices rose as concerns about a decrease in Chinese demand were replaced by worries over supply constraints.
The Credit Suisse Fear Barometer, a gauge for investor sentiment, hit a six-month high late last week and the CBOE Volatility Index <.VIX>, a similar gauge, also jumped more than 10 percent from its lowest point over the past week.
When we've seen a high CSFB (Credit Suisse Fear Barometer) and jumpy VIX in the past, it has usually meant a short-term rebound in the S&P, said Jason Goepfert of SentimenTrader in a report.
Chip-makers recovered from last week's fall with Nvidia Corp
Shares of credit card company American Express
But shares of oilfield services company Halliburton Co
J.C. Penney Co Inc
Advancing stocks outnumbered declining ones on the NYSE by 2,114 to 882. On the Nasdaq, advancers beat decliners 1,721 to 939.
(Additional reporting by Doris Frankel in Chicago; Editing by Kenneth Barry)