- 22Aug
(Reuters) - Stocks surged more than 1 percent in early trading on Monday following four weeks of equity losses as stocks rebounded globally.
Equities have been pressured of late by growing concerns about theeconomy, given a string of weak economic data and the ongoing sovereign debt crisis in Europe.
European stocks gained 2.1 percent, while the MSCI world equity index rose 0.3 percent. .EU
"Recent data has been inconclusive about whether we're going into recession, so the market bounces back and forth daily based on mood swings," said Andrew Slimmon, managing director of global investment solutions at Morgan Stanley Smith Barney in Chicago.
"However, with interest rates being where they are, stocks are very cheap, and that's a very powerful and positive indicator."
The Dow Jones industrial average .DJI jumped 176.15 points, or 1.63 percent, at 10,993.80. The Standard & Poor's 500 Index .SPX was up 19.92 points, or 1.77 percent, at 1,143.45. The Nasdaq Composite Index .IXIC advanced 47.32 points, or 2.02 percent, at 2,389.16.
The S&P has fallen more than 13 percent so far in August, with volatility driving the index down at least 4 percent for six days over the past two weeks. Some investors believe the speed and size of the drops suggested the market could be oversold. The CBOE Volatility index .VIX sank 5.2 percent but remained at elevated levels.
Investors looked ahead to a speech by U.S. Federal Reserve Chairman Ben Bernanke on Friday at the central bank's annual meeting in Jackson Hole, Wyoming.
Some investors hope the Fed will announce new stimulus after the central bank promised earlier this month to keep interest rates near zero for at least two more years, and said it would consider further steps to help growth.
"It's certainly possible that we could see more stimulus, but my worry is that as the week progresses, expectations will be built into the market that could lead to our having another decline if nothing is announced," Slimmon said.
U.S. crude futures rose 2.3 percent on a rebound in equities, and helped lift the S&P energy index .GSPE by 1.2 percent.
But Brent crude fell 1 percent, on expectations Libyan oil exports might resume after the civil war ends. Libyan rebels swept into the heart of Tripoli and met scattered resistance.
Tensions in the Middle East and a spike in oil prices contributed to equity weakness earlier this year.
About 45,000 striking Verizon Communications Inc (VZ.N) employees were set to go back to work on Tuesday after the company and unions agreed to resume bargaining. Shares of the Dowcomponent rose 1.1 percent to $35.11.
(Editing by Jeffrey Benkoe)
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