Stocks kicked off the first trading day of February with a bang, extending their robust rally from the previous month, boosted by some positive global economic news in addition to a report that Greece and its private creditors may soon agree upon a deal.
The Dow Jones Industrial Average rallied 83.55 points, or 0.66 percent, to close at 12,716.46, snapping a four-day losing streak. Hewlett-Packard and BofA led the blue-chip gainers.
The S&P 500 added 11.68 points, or 0.89 percent, to end at 1,324.09. The Nasdaq jumped 34.43 points, or 1.22 percent, to finish at 2,848.27.
The CBOE Volatility Index, widely considered the best gauge of fear in the market, ended below 19.
All 10 S&P sectors ended firmly in positive territory, led by banks.
“Typically, when you see a strong January, a lot of the momentum tapers off in February,” noted Alan Gayle, senior investment strategist at RidgeWorth Capital Management. “[Still,] we remain cautiously optimistic on the markets and are overweight equities… it’s still early in the year, but I think this is going to be a better year for the economy and we’re going to see greater global stability and that should give a positive bias to equities.”
On the economic front, private employers added 170,000 positions in January, according to the ADP national Employment Report. The ADP report comes ahead of the closely watched government non-farm payroll report on Friday.
Nonfarm payrolls are expected to post a gain of 150,000 in January, according to a Reuters survey, with the unemployment rate seen holding steady at 8.5 percent.
“Given what we’ve seen in terms of the other economic data, the chances that we’ll meet the expectation number [on Friday] is quite good,” said Brian Gendreau, market strategist at Cetera Financial Group.
Meanwhile, the pace of growth in the U.S. manufacturing sector came in slightly below expectations, but still rose to its highest level since June, according to the Institute for Supply Management. And construction spending logged its fifth consecutive monthly gain in December, according to the Commerce Department.