Wall Street continues rally despite discouraging data as oil recovers

Comparing market performance graph

Investing.com -

Investing.com - U.S. stocks managed to post slight gains on Monday and continue last week's rally as investors digested news on global monetary policy and observed the rebound in oil prices from early losses and the S&P 500 was on track to break a two-month losing streak with a slight rise for February.

At 16:33GMT or 11:33AM ET, the Dow 30 rose 45 points or 0.27%, while the S&P 500 traded up 6 points or 0.29% and the tech-heavy NASDAQ Composite gained 19 points or 0.42%.

Global monetary policy was in focus after G20 finance ministers and central bankers agreed over the weekend to use "all policy tools - monetary, fiscal and structural - individually and collectively" to reach the group\'s economic goals, citing a series of risks to world growth, but failed take concrete action.

Nevertheless, the Chinese central bank (PBOC) cut the reserve requirement ratio (RRR) by 0.5% on Monday in order to maintain reasonable and amble liquidity in the financial system.

Speculation over European monetary policy was also in the limelight as investors learned that consumer price inflation in the euro zone declined for the first time in five months in February, adding to pressure on the European Central Bank (ECB) to step up measures to boost price growth in the euro area, official preliminary data showed on Monday.

Experts were unanimous on Monday that the ECB will take further easing measures at the next policy decision meeting scheduled for March 10 as a Reuters' survey showed that all of the 18 euro money market traders polled thought the euro zone central bank would cut the deposit rate.

Stateside, investors were waiting for the release on Friday of the monthly jobs report, the Federal Reserve's last big piece of data before making their own policy decision on March 16.

Meanwhile, Monday's session saw the publication of some discouraging data on U.S. manufacturing activity. The Chicago PMI plunged more than expected and entered contraction, while the Dallas Fed manufacturing business index was unable to recover as much as expected. Investors will have a broader picture of the country-wide manufacturing activity with the ISM data to be released on Tuesday.

In discouraging news for the U.S. housing market, pending home sales also hit a one-year low in January with a surprise decline of 2.5%, compared to analyst expectations for a 0.5% rise.

Traders also eyed the move higher in crude after a Reuters' survey on Monday showed that OPEC oil output was expected to have dropped by 280,000 barrels per day in February and industry research group Baker Hughes reported that the number of rigs drilling for oil in the U.S. decreased by 13 last week to 400, the tenth straight weekly decline.

Crude oil futures for April delivery on the New York Mercantile Exchange rose $0.88, or 2.68%, to trade at $33.66 a barrel by 16:35GMT, or 11:35AM ET, while Brent oil advanced $1.15 or 3.24% to $36.59.

In corporate movements, Federal-Mogul Corporation (O:FDML) skyrocketed more than 40% after Carl Icahn's investment company said it wanted to acquire the remainder of the business, while CONSOL Energy Inc (N:CNX) surged over 10% on the news that it would sell its Buchanan Mine and other coal assets for about $420 million.

After reporting earnings, Lumber Liquidators Holdings Inc (N:LL) slumped almost 4%, AMC Entertainment Holdings Inc (N:AMC) dropped more than 3% and Warren Buffett's Berkshire Hathaway (N:BRKa) advanced 1.7%.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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