Stocks rose across the board on the first Monday in October. IBM was responsible for a big chuck of the gains on the Dow, along with energy stocks while the S&P 500 and Nasdaq moved back into the black for the first time this year. The S&P rose a 5th straight day in what would be its longest rally of the year. Junk bonds also rose. Much of the positive news on Wall Street rested on the notion that it appears investors are resigned to the fact that the Federal Reserve will not raise interest for the rest of 2015, thus delaying the inevitable into next year.
“Investors increasingly believe any Fed action is off the table for the rest of the year. It would seem to me the Fed was reluctant to raise rates in September. Now we had a lousy jobs report, which was really the only shed of consistently positive news. There is a technical element to the stock market gains. It just remains to be seen if that holds. It’s all going to be about earnings season.”
In unrelated news, former Fed Chairman Ben Bernanke, now with the Brookings Institution is touting his just released memoir “The Courage to Act,” in which he talks about about “what went right and what went wrong” during the financial crisis of 2008 and the subsequent government bailout of Wall Street. He admits in his autobiography during an interview with USA Today:
“More more corporate executives should have gone to jail for their misdeeds.” He goes on to say that “he and the Fed made some mistakes saying they were slow to realize just how serious the economic downturn would become, and blames himself for not doing more to explain to Americans why it was in their interests to rescue the financial firms that had helped cause it.”
Watch USA Today Washington Bureau Chief Susan Page’s interview with Ben Bernanke here.
Here are the final numbers from Monday, 10/5/15 on Wall Street:
Dow Jones Industrial Average: 16,776.37 (+304.00/ +1.85%)
NASDAQ: 4,781.77 (+73.49 / +1.56%)
S&P 500: 1987.36 (+35.69 / +1.83%)