NEW YORK (AFP) – U.S. stocks Monday followed global markets higher, rallying on Larry Summers’s withdrawal as a candidate to lead the U.S. Federal Reserve.
About 45 minutes into trade, the Dow Jones Industrial Average jumped 157.47 (1.02 percent) to 15,533.53
The broad-based S&P 500 shot up 13.95 (0.83 percent) to 1,701.94, while the tech-rich Nasdaq Composite Index rose 16.18 (0.43 percent) to 3,738.52.
Equity markets in Asia closed higher, while leading indices in Britain, France and Germany were scoring gains.
Summers, a Harvard economist who served as President Barack Obama’s chief economic adviser during the aftermath of the 2008 financial crisis, on Sunday notified Obama that he was withdrawing from the race to succeed Ben Bernanke as Fed chairman, avoiding a likely bruising confirmation battle in the Senate.
Besides the Summers news, markets were also cheered by a weekend agreement between Russia and the U.S. to bring Syria’s chemical weapons under international control. The deal is designed to avert a U.S.-lead military strike on Syria.
Investors will keep a keen eye on the Fed’s two-day Federal Open Market Committee meeting concluding Wednesday, which could result in a scaling-back of the Fed’s $85 billion per month bond-buying program.
The Fed has said in recent months that it expects to taper the program this year if the economy continued to improve broadly. Briefing.com analyst Patrick O’Hare predicted a $10 billion taper this week.
“The Fed will likely conclude that it is time to take a small step down in its asset purchases,” O’Hare said. The market, he added, has been conditioned to the idea of a “light tapering.”
Among large companies, Dow component JPMorgan Chase gained 1.3 percent, fellow bank Citigroup tacked on 1.5 percent and aerospace giant Boeing rose 2.8 percent. Software company Oracle advanced 1.7 percent.
Tech giant Apple continued to slump following last week’s disappointing launch of two iPhones. Shares were down 1.7 percent.
Packaging company Boise surged 26.0 percent after Packaging Corp. of America announced a $2.0 billion acquisition of the company. Packaging Corp. rose 6.4 percent.
Bond prices fell. The yield on the 10-year Treasury dropped to 2.79 percent from 2.90 percent Friday, while the 30-year dipped to 3.79 percent from 3.85 percent. Prices and yields move inversely.
Copyright 2013 The National Memo