U.S. stocks trimmed early gains but remained sharply higher Monday, rallying as investors awaited a deluge of corporate earnings and a U-turn on tax policy by the U.K. government soothed global bond markets.What’s happening
The Dow Jones Industrial Average
was up 476 points, or 1.6%, at 30,111, after rising 677 points at its session high.
The S&P 500
was up 86 points, or 2.4%, at 3,667.
The Nasdaq Composite jumped 310 points, or 3%, to 10,631.
Stocks fell last week in extremely volatile trade, with major indexes reversing steep losses Thursday to end sharply higher only to tumble on Friday. The Dow saw a 1.2% weekly fall, while the S&P 500 shed 1.6% and the Nasdaq Composite lost 3.1%.
What’s driving markets Last week’s volatile activity, particularly Thursday’s intraday turnaround, had analysts pondering whether the stocks were exhibiting behavior associated with market bottoms. “One way to know if markets are overstretched is if negative news fails to sink equity markets further. What we saw last Thursday was different, namely a deep pool of bargain hunters,” said Sebastien Galy, senior macro strategist at Nordea Asset Management, in a note. “What we saw was likely extreme bearish positioning being reduced. This is an encouraging sign, but it is not yet a new dawn — we continue to prefer cautious positions,” he said. Some relief was attributed to a sharp pullback by yields on U.K. government bonds, known as gilts, after new Chancellor of the Exchequer Jeremy Hunt abandoned the majority of the £45 billion ($50.9 billion) in previously announced unfunded tax cuts that were blamed for sparking a bout of global market volatility and stoking fears of a broader breakdown of the global financial system. See: U.K. chancellor throws out almost all major tax cuts from the m …