Stocks showed a significant move to the upside during trading on Monday as trading resumed following the long holiday weekend. With the upward move on the day, the Dow and the S&P 500 reached new record closing highs.
The major averages all closed firmly in positive territory. The Dow jumped 373.98 points or 1.1 percent to 33,527.19, the Nasdaq spiked 225.49 points or 1.7 percent to 13,705.59 and the S&P 500 surged up 58.04 points or 1.4 percent to 4,077.91.
The rally on Wall Street came as traders finally had an opportunity to react to the monthly jobs report, which was released while the markets were closed on Friday.
The closely watched report from the Labor Department showed employment in the U.S. spiked by much more than expected in the month of March.
The Labor Department said non-farm payroll employment surged up by 916,000 jobs in March after climbing by an upwardly revised 468,000 jobs in February.
Economists had expected employment to jump by 647,000 jobs compared to the addition of 379,000 jobs originally reported for the previous month.
The bigger than expected increase in employment reflected widespread job growth, with employment in the leisure and hospitality sector once again leading the way.
The stronger than expected job growth resulted in a continued decrease by the unemployment rate, which fell to 6.0 percent in March from 6.2 percent in February. The drop matched expectations.
With the decrease, the unemployment rate fell to its lowest level since hitting 4.4 percent in March of 2020, when coronavirus lockdowns were just starting to take effect.
Stocks saw further upside following the release of a report from the Institute for Supply Management showing its reading on activity in the service sector soared to an all-time high in March.
The ISM said its Services PMI surged up to 63.7 in March from 55.3 in February, with a reading above 50 indicating growth. Economists had expected the index to rise to 58.5.
“Respondents’ comments indicate that the lifting of coronavirus (COVID-19) pandemic-related restrictions has released pent-up demand for many of their respective companies’ services,” said Anthony Nieves, Chair of the ISM Services Business Survey Committee.
Steel stocks showed a substantial move to the upside on the day, driving the NYSE Arca Steel Index up by 2.4 percent to its best closing level in well over nine years.
Substantial strength was also visible among airline stocks, with the NYSE Arca Airline Index soaring by 2 percent.
Software stocks also turned in a partly strong performance, resulting in a 1.9 percent jump by the Dow Jones U.S. Software Index. The index reached its best closing level in well over a month.
Semiconductor, retail and computer hardware stocks also saw considerable strength on the day, moving higher along with most of the other major sectors.
On the other hand, energy stocks were among the few groups to buck the uptrend, with a steep drop by the price of crude oil weighing on the sector. Crude for May delivery plummeted $2.80 to $58.65 a barrel.
In overseas trading, many stock markets across the Asia-Pacific region were closed on Monday, although Japan’s Nikkei 225 Index advanced by 0.8 percent and South Korea’s Kospi rose by 0.3 percent.
Meanwhile, the major European markets were closed on the day in observance of Easter Monday.
In the bond market, treasuries moved to the downside as traders reacted to the upbeat economic data. As a result, the yield on the benchmark ten-year note, which moves opposite of its price, climbed 4.1 basis points to 1.720 percent.
The U.S. economic calendar for Tuesday is relatively light, although the Labor Department is scheduled to release its report on job openings in the month of February.
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