Investing.com – U.S. stocks continued to rally on Monday after having tallied their best week since last November as a rebound in crude fueled market sentiment and investors concentrated on the concern over the possible exit of Britain from the European Union in a relatively light calendar day.
Although the blue-chip index surged more than 200 points at the intraday high, some wind went out of the buying and the Dow 30 traded up 192 points or 1.17%, while the S&P 500 rose 23 points or 1.18% and the tech-heavy NASDAQ Composite advanced 57 points or 1.26% at 16:21GMT or 11:21AM ET.
As a sign of the broad-spread buying, advancers outnumbered decliners in a ratio of 6 to 1 on the NYSE and 5 to 1 on the Nasdaq.
With almost 90% of the S&P 500 companies having already reported earnings for the last three months of 2015, earnings per share were slated to have dropped approximately 4%, equivalent of the worst quarter of growth since the third quarter 2009, according to a report by Bank of America (N:BAC).
Meanwhile, Fact Set reported that 68% of the S&P companies have beat on profit and 48% have presented better-than-expected revenues.
In Monday’s earning news, Allergan (N:AGN_pa) reported a quarterly EPS of $3.41, beating the consensus forecast of $3.34.
Motorola (N:MSI) Solutions, Fitbit Inc (N:FIT)and ONEOK Inc (N:OKE)will report after the market close.
Also on the business front, Verizon Communications Inc (N:VZ)entered an agreement to purchase XO Communication’s fiber-optic business for approximately $1.8 billion.
Meanwhile, crude staged a strong comeback rising more than 5% as the International Energy Agency (IEA) reported that the supply gout would turn around in 2017, but also noted that U.S. shale oil production was expected to fall by 600,000 barrels per day (bpd) this year and another 200,000 bpd in 2017.
The news followed a Baker Hughes’ report that showed the number of rigs drilling for oil in the U.S. decreased by 26 last week to 413, the ninth straight weekly decline.
Crude oil futures for April delivery on the New York Mercantile Exchange surged $1.75, or 5.51%, to trade at $33.50 a barrel by 16:27GMT, or 11:27AM ET, after rising by as much as $1.88, or 5.6%, to an intraday peak of $33.63, the most since February 1.
Brent oil traded up $1.76 or 5.33% to $34.78.
In the currency market, the U.S. dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, was up 0.84% at 97.43.
Of particular note, the British pound was on track for its biggest one-day drop since May 2010 after London Mayor Boris Johnson’s shock decision to back a campaign for Britain to leave the European Union in a June referendum and a news report suggested that several of Prime Minister David Cameron’s business advisors declined to sign off on the agreement made with the EU.
GBP/USD hit a seven-year low at 1.4058, though pressure subsided and cable traded down 1.89% to 141.33.
On the macro front, the flash U.S. manufacturing PMI for February fell to its lowest level since October 2012 in another sign of weakness in the world’s largest economy.
Markit chief economist Chris Williamson noted that factories were reporting the worst business conditions in over three years.
“Every indicator from the flash PMI survey, from output, order books and exports to employment, inventories and prices, is flashing a warning light about the health of the manufacturing economy,” Williamson said.
In a data-filled week, the U.S. will report preliminary Q4 GDP on Friday.