U.S. stocks rebound; S&P 500 at best in 2 months
NEW YORK (MarketWatch) -- U.S. stocks rose sharply Monday, with the S&P 500 posting its best session in two months as Wall Street bounced back from its worst week of the year.
"We're in a multiyear recovery from the lows of '09. We currently see the U.S. market 37% to 39% below fair value. You get good value when people are worried about things," said Craig Callahan, founder and chairman of ICON Advisers in Greenwood Village, Colo.
The Dow Jones Industrial Average (DJIA) rose 135.10 points, or 1.1%, to 12,504.48, breaking a string of six straight losses.
J.P. Morgan Chase & Co. (JPM) lost the most ground among the Dow's 30 components, dropping 3%. Chief Executive Jamie Dimon told a conference Monday in New York that the bank would suspend its share-repurchase program but not its dividend in the wake of its more than $2 billion trading loss. Read more on J.P. Morgan's buyback halt.
The S&P 500 Index (SPX) added 20.77 points, or 1.6%, to 1,315.99, with natural-resource stocks and technology the best performer among its 10 sectors.
The Nasdaq Composite
rose 68.42 points, or 2.5%, to 2,847.21, its best day in five months. Its biggest component,
"It looks like they priced it a month ago, and in that month the market has dropped about 10%, so it was priced on March-April prices when we're now in a May slump," said Callahan.
"Eaton right now is saying you investors are pricing stocks incorrectly, and we think Cooper is worth a lot more," said Callahan, predicting that additional acquisitions are ahead, with companies sitting on lots of cash and in view of current valuations.
"The stock market is oversold from a technical perspective and ripe for a reflex rally but needs a high-profile positive catalyst to maintain any rally. Facebook was in position to do just that with its IPO, but failed to deliver for a number of reasons, including lousy execution by the Nasdaq," Fred Dickson, chief investment strategist at Davidson Cos., wrote in emailed commentary.
For every stock falling, about six gained on the New York Stock Exchange, where 798 million shares traded. NYSE composite volume was about 3.8 billion, while Nasdaq Composite volume was 1.9 billion, both under the past month's volume.