Stocks rose as materials paced broad gains: Monday recap

U.S. stocks rose Monday, with the Nasdaq out front. The S&P 500 added 51.23 points, or 0.66%, to close at 7,773.95. The Nasdaq Composite climbed 286.45 points, or 1.05%, to 27,477.31, the strongest of the three major gauges. The Dow Jones Industrial Average gained 90.94 points, or 0.18%, to 51,267.90. The advance was broad. It extended last week’s gains and carried the major averages into the new quarter, with every headline index finishing in the green.

The buying reached most corners of the sector board. Materials led, up 1.31%, with communication services close behind at 1.17% and energy higher by 1.00%. Financials rose 0.73% and health care added 0.72%, both ahead of a technology sector that gained 0.56% even as the tech-heavy Nasdaq paced the indexes. Consumer staples climbed 0.63%, while industrials brought up the rear among the day’s gainers with a 0.09% advance. Ten of the eleven sectors finished higher. Real estate was the lone decliner, off 0.34%. The gap between the best and worst groups came to 1.65 percentage points, a narrow band that pointed to steady, broad-based buying. Materials and energy, the day’s two strongest groups, tend to track the economic cycle, and both finishing near the top is a risk-on tell.

The day’s marquee release came from the services economy. The Institute for Supply Management said its services index eased to 54.9% in September, down from 55.4% in August and a touch below what forecasters had penciled in. The reading marked a 27th straight month above the 50 mark that separates expansion from contraction, so activity cooled while staying in growth territory. The details were mixed. The business-activity gauge slipped to 56.5% and new orders held firm at 59.8%, while a hiring measure crept back above the breakeven line to 50.1%. The prices gauge, though, held at 74%, its highest in more than three years and a reminder that cost pressures in services have not faded. Thirteen service industries reported growth on the month, the institute said, against four that contracted.

Beneath the headline averages, the rally had company. The Russell 2000 exchange-traded fund rose 0.66% on the day, matching the S&P 500 tracker’s 0.67% and trailing the Nasdaq-100 fund’s 0.88%. Breadth was wide rather than concentrated in a handful of large names, a sign the day’s gains were more than a mega-cap story. The Cboe Volatility Index edged up to 15.52, a low reading that signals little appetite for downside protection among options traders. In the bond market, the 10-year Treasury yield eased to 5.24%, still high by the standards of the past decade.

The week fills out from here. Trade figures and remarks from several Federal Reserve officials are due Tuesday, minutes from the Fed’s last policy meeting arrive Wednesday, and a preliminary reading on consumer sentiment closes the week Friday. Third-quarter earnings season ramps up later in the month. Monday’s services report gave investors an early read on the quarter before the heavier data and the bulk of corporate results arrive. Each release offers another gauge of how the economy is holding up as the fourth quarter begins.

This is a general-market summary for information only — not investment advice, and not a recommendation regarding any security.