U.S. stocks closed higher on Monday, rebounding from initial losses on the disappointing jobs report as weak data renewed hopes of a delayed increase in interest rates.
"When (jobs) misses by so much and there's negative adjustments to the months that preceded it there's a concern at the back of your mind It's a moronic (plunge) into stocks (that say) because the economy is bad the Fed has to hold off," said Robert Pavlik, chief market strategist at Boston Private Wealth. "I'd rather be in a car that's moving forward."
The major averages turned positive in early trade as the morning's service sector and manufacturing data continued to indicate moderate growth. Traders took the lack of significant growth as a sign of further dovish policy from the Federal Reserve.
"This puts September much more in play than June, if June was ever in play," said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
With the weaker jobs report, PNC's economics team pushed back its expectations of a rate hike to September from the previous estimate for a July liftoff.
"The labor market is getting better. It's not where we want it to be but definitely getting to the right place," said Gus Faucher, senior macroeconomist at PNC Financial Services. "What the Fed wants to see is further indications that there's tightening in the job market and slack being absorbed," he said
One encouraging sign is the market share of part-time employees peaked at 6.6 percent in 2010 and is now down to 4.5 percent, Faucher said. He noted the economy should see "above-trend growth for the rest of the year."
Crude oil settled up 6.11 percent, or $ 3.00, at $52.14 a barrel as investors cheered signs of increased pressure on supply from Iran and Saudi Arabia. The gains lifted energy stocks about 2 percent as the leading sector in the S&P 500.
Investors also found encouragement from the U.S. dollar, which held steady while the euro traded near $1.09. The greenback is down nearly 2 percent for April after rapid advances earlier in the year.
A "no longer rising dollar is encouraging," said Nick Raich, CEO of The Earnings Scout. "I think the rally today is (investors thinking) the jobs number is so bad the Fed goes on pause and that gives relief for the dollar."