Investing.com -- U.S. stocks surged on Monday extending gains from late last week, as hawkish sentiments for an imminent rate hike continue to fade following the release of continued disappointing economic data on Monday.
The Institute of Supply Management reported on Monday morning that its September non-manufacturing purchasing index dipped to 56.9 from a level of 59.0 the previous month and below consensus estimates of a 58.0 reading. In a separate report, the Services Purchasing Managers' Index fell to 55.1 last month, below consensus expectations of a 55.8 reading, amid weakness in growth in new orders and production overall. Both followed a gloomy September national employment report on Friday, when the U.S. Department of Labor reported that non-farm payrolls for September increased by 142,000, significantly below consensus estimates from analysts of a 203,000 gain.
The Dow Jones Industrial Average soared 304.06 or 1.85% on Monday to 16,776.43, building on gains from Friday's session when it rebounded by more than 300 points, completing its strongest reversal in four years. The NASDAQ Composite index and S&P 500 Composite index also rose broadly, in spite of a major sell-off among biotechnology stocks. The NASDAQ jumped 73.48 or 1.56% to 4,781.26 on Monday, as it continued its push back to the symbolic 5,000 level.
The S&P 500, meanwhile, rose 35.69 or 1.83% to 1,987.05, as stocks in all 10 of its sectors closed in the green. Stocks in the Energy, Basic Materials and Telecommunications sectors led, each gaining more than 2.5% on the day. With Monday's surge, the S&P 500 extended a mild winning streak to its fifth-consecutive session.
Shares in British Petroleum, Plc. rose by nearly 3% to $33.49 after the U.S. Department of Justice announced a $20.8 billion settlement with the major U.K. oil and gas company to resolve civil claims stemming from an April, 2010 well blowout and massive oil spill that ensued in the Gulf of Mexico. The resolution is the largest in the department's history involving a single entity.
The top performer on the Dow was General Electric Company (NYSE:GE), which jumped 1.39 or 5.46% to 26.86, after reports surfaced that activist investor Nelson Peltz's firm Trian has taken a $2.5 billion stake in the multinational conglomerate. In April, GE announced that it would be selling a large percentage of its financial arm to place a greater focus on its core industrials. The worst performer was Nike Inc (NYSE:NKE), which lost 0.86 or 0.69% to 124.35. Nike was the only Dow component to close in the red on Monday.
The biggest gainer on the NASDAQ was Micron Technology Inc (NASDAQ:MU), which soared 1.57 or 9.87% to 17.48 after posting stronger-than-expected earnings on Friday. Shares in the Boise, Idaho-based semiconductor company are still down roughly 55% this year. The worst performer was Avago Technologies, which fell 2.24 or 1.82% to 121.09. A host of pharmaceutical stocks, meanwhile, were among the worst performers of the day on the NASDAQ.
Micron was also the top performer on the S&P 500, just ahead of Alcoa Inc (NYSE:AA) which gained 0.88 or 9.24% to 10.40. Alcoa (NYSE:AA) will report its quarterly earnings later this week, its first since announcing in late-September that it will split into two publicly traded companies. The worst performer was Mallinckrodt (NYSE:MNK), which fell 4.54 or 6.89% on Monday to close at 61.33.
On the New York Stock Exchange, advancing issues outnumbered declining ones by a 2,772 to 375 margin.