U.S. stocks reversed to trade higher as investors shrugged off Friday’s disappointing jobs report amid the weaker dollar.
“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,” said Nick Raich, CEO of The Earnings Scout.
The Dow Jones industrial average briefly added 100 points after falling triple digits in the open.
Markets were closed on Friday and stocks opened sharply lower on Monday. The major averages turned positive in early trade.
“I don’t know why bad news continues to be good news,” said Peter Boockvar, chief market analyst at The Lindsey Group, who noted the weaker dollar.
The U.S. dollar traded lower while the euro crept above $1.10.
“The theme of ‘data dependent’ is back in the market,” said Peter Cardillo, chief market economist at Rockwell Global Capital. He still expects the Federal Reserve to raise rates in the second half of this year, but said that weaker economic data could push a rate hike out to 2016.
The ISM nonmanufacturing Index was 56.5 in March, its lowest level in three months. The Markit Purchasing Managers Index rose to 59.2 in March, the highest level since August.
“We’re really trying to recalibrate what we’re thinking about the economy,” said Art Hogan, chief market strategist at Wunderlich Securities. “You’ve got weaker economic data and lackluster earnings (expectations).”
Alcoa reports quarterly results this Wednesday in the unofficial start to the earnings season.
Futures plunged on Friday after the monthly employment report showed the addition of 126,000 jobs, far below the estimated 245,000 from a Reuters poll.
“Maybe this will kick off a correction, which I think will be healthy,” said Maris Ogg, president of Tower Bridge Advisors, noting that the “is very fairly valued” and earnings expectations are low to negative.
U.S. markets were closed for Good Friday and European markets were closed for both Good Friday and Easter Monday. Asian stocks outside Japan gained on hopes the weak jobs report would push out a rate hike by the Federal Reserve.
U.S. stock futures continued to indicate a lower open following remarks by New York Federal Reserve President William Dudley that the central bank will watch subsequent data to see if March’s report was an aberration or an indicator of greater economic weakness. Weekly jobless claims have held to lower levels and had suggested a stronger read on monthly nonfarm payrolls.
Dudley was the first Fed official to speak publicly since the March labor report.
“The dollar has come a very long way in a very short period of time. The recent economic data lowers the possibility they’re going to tighten soon and that gives the dollar some air,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott.
The U.S. 10-year Treasury yield held near 1.85 percent.
Over the weekend, Greece’s finance minister told reporters in Washington after a meeting with International Monetary Fund managing director Christine Lagarde that the country “intends to meet all obligations to all its creditors, ad infinitum.” Athens is due to pay the IMF 450 million euros ($494 million) Thursday.
The only data release due Monday is the ISM Services index, due at 10am Eastern time.
Tesla delivered 10,030 vehicles during the first quarter, its highest quarterly total ever and a 55 percent increase over the first quarter of 2014.
Lorillard and Reynolds American are on watch today, on a shift in sentiment about whether a proposed merger between the tobacco giants will be allowed to proceed. The stocks had fallen in recent weeks on sentiment that it would be rejected, but reports emerged late last week that the FTC was leaning towards a proposed compromise that would allow it to go through.
The S&P 500 traded up 10 points, or 0.50 percent, at 2,077, with utilities leading advancers and financials the only sector struggling to stay in the green.
The Nasdaq traded up 20 points, or 0.41 percent, at 4,907.
Three shares advanced for every decliner on the New York Stock Exchange, with an exchange volume of 168 million and a composite volume of 721 million in morning trade.
Crude oil futures gained $1.47 to $50.61 a barrel on the New York Mercantile Exchange. Gold futures gained $18.20 to $1,219.10 an ounce as of 10:53 a.m.
—Reuters and CNBC’s Peter Schacknow contributed to this report.
On tap this week:
Earnings: A. Schulman
Earnings: International Speedway, Schnitzer Steel, Dave and Buster’s
8:50 a.m.: Minneapolis Fed President Narayana Kocherlakota
10:00 a.m.: JOLTs
1:00 p.m.: $24 billion 3-year note auction
3:00 p.m.: Consumer credit
Earnings: Alcoa, Family Dollar, Rite Aid, Bed Bath and Beyond, Pier 1 Imports, Global Payments, RPM International
8:00 a.m.: Fed Gov. Jerome Powell on challenges for monetary policy
10:00 a.m.: New York Fed’s Dudley on economy
1:00 p.m.: $21 billion 10-year note auction
2:00 p.m.: FOMC minutes
Earnings: Walgreen Boots Alliance, Constellation Brands, Ruby Tuesday, PriceSmart
8:30 a.m.: Initial claims
10:00 a.m.: Wholesale trade
1:00 p.m.: $13 billion 30-year auction
8:30 a.m.: Import prices
8:45 a.m.: Richmond Fed President Jeffrey Lacker on economic outlook
12:20 p.m.: Minneapolis Fed’s Kocherlakota
2:00 p.m.: Federal budget