Stocks Rise as Oil Drop Counters Treasury Yield Fears
Major U.S. stock indices closed higher on Monday, as falling oil prices helped offset concerns over rising Treasury yields. The Dow Jones Industrial Average gained 0.18%, while the S&P 500 and Nasdaq Composite rose 0.66% and 1.05%, respectively. The Dow added 90.94 points, extending gains from the previous session after a slowdown in the labor market eased fears of an imminent interest rate hike. However, the 10-year Treasury yield continued to climb, reaching its highest level in over two decades last week, raising worries about higher borrowing costs.
Oil prices also drew investor attention, with Brent crude futures dropping 1.89% to $100.32 per barrel, and West Texas Intermediate crude falling 1.8% to $89.43 per barrel. The G7's decision to release fuel reserves contributed to the decline in oil prices. Investors are now focusing on the minutes from the Federal Reserve's latest meeting, set to be released on Wednesday, for any hints about future monetary policy.
On the macroeconomic front, U.S. service sector activity accelerated sharply in September, with the S&P Global services PMI jumping to 58.8 and the composite PMI rising to 58.4. The Institute for Supply Management also reported continued expansion in services activity, with the Services PMI easing slightly to 54.9 but still marking 27 straight months of growth. The ISM noted strong business activity and hiring, despite a slight moderation in new orders.
Among individual stocks, Cisco Systems Inc. (CSCO) led the Dow's gainers with a 2.84% increase, while Intel Corp. (INTC) was the top decliner, falling 6.40%. In the S&P 500, Seagate Technology Plc (STX) surged 9.66%, and Nektar Therapeutics (NKTR) dropped 10.03%. The Nasdaq 100 saw Mercadolibre Inc. (MELI) rise 10.05%, while Qvc Group Inc Series A (QVCGA) fell 13.49%.