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1st LD Writethru: U.S. stocks extend gains as rate-hike fears ease

Xinhua, October 6, 2015 Adjust font size:

U.S. stocks surged for a second straight session Monday, as Wall Street believed that the possibility for the U.S. Federal Reserve to raise interest rates this year becomes lower after a poor jobs report.

The Dow Jones Industrial Average leapt 304.06 points, or 1.85 percent, to 16,776.43. The S&P 500 jumped 35.69 points, or 1.83 percent, to 1,987.05. The Nasdaq Composite Index advanced 73.49 points, or 1.56 percent, to 4,781.26.

U.S. total nonfarm payroll employment increased by 142,000 in September, well below market consensus of 203,000, the Labor Department announced Friday.

Analysts thought that a soft jobs report could give the Fed some reason to postpone rate hikes.

The U.S. Non-Manufacturing Index also came out weaker-than-expected Monday. The Index registered 56.9 percent in September, lower than the August reading of 59 percent and below market expectations of 57.5 percent, said the Institute Supply Management (ISM) in its monthly survey.

"Services are far more important to the US economy than manufacturing; as long as the spillover effect from a slowdown in manufacturing does not weigh too heavily on services, the economy will continue to steadily produce jobs and growth into the fourth quarter," said Jay Morelock, an economist at FTN Financial, in a note.

Adding more optimism into the market, overseas shares saw a broad-based strong rally Monday.

European equities soared as a weak U.S. employment report dampened expectations that the Fed would start raising interest rates soon, with French benchmark index CAC 40 jumping 3.54 percent.

In Asia, Tokyo stocks jumped 1.58 percent Monday as investor sentiment was lifted by gains in U.S. equities before the weekend, while the Chinese stock market was still closed for the country's seven-day National Day holiday.

Meanwhile, investors keep an eye on the third-quarter earnings reporting season, which will kick off later this week.

On Friday, U.S. stocks reversed deep losses to end sharply higher as investors digested the soft nonfarm payroll report. Endit