Stocks continue higher following worst week in two years.
U.S. stocks advanced briskly on Monday, as Wall Street extended its recovery following the worst weekly slide in two years.
The Dow Jones Industrial Average (NYSEARCA:DIA) surged 410.37 points, or 1.7%, to close at 24,601.27. The blue-chip index recovered more than 300 points by Friday’s close to avoid its worst weekly drop since the financial crisis.
The broader S&P 500 Index (NYSEARCA:SPY) climbed 1.4% to 2,656.00, with all 11 sectors contributing to the gain.
Meanwhile, the technology-driven Nasdaq Composite Index (NYSEARCA:QQQ) rose 1.6% to end at 6,981.97.
A measure of 30-day volatility known as the CBOE VIX (NYSEARCA:VXX) declined sharply on Monday. The so-called “fear index” closed down 12.4% at 25.45. Vol experienced huge gains last week and traded as high as 50.
President Donald Trump on Monday unveiled a new plan to rebuild America’s infrastructure. The blueprint proposes $1.5 trillion in spending over the next ten years to fix American roads, highways and airports. This includes a $200 billion pledge in federal spending, with the rest coming from state, local and private sources.
The new infrastructure proposal has already divided Congress, with Democrats demanding more federal spending. In order to commit more federal funds, the government would need to raise taxes and create additional sources of revenue.
The Final Word: Stocks are in recovery mode following their worst week in two years. The sharp decline over the past two weeks has tainted the market’s outlook as the so-called Trump reflation trade comes under renewed skepticism.