U.S. stocks opened higher Monday, attempting to bounce from a sharp sell-off last week, as investors eyed low oil prices in a shortened trading week.
The Dow Jones industrial average gained more than 100 points in the open, with Goldman Sachs leading nearly all constituents higher.
Financials jumped more than 1 percent to lead advancers in the S&P 500. Both the S&P and Dow are lower year-to-date.
“This time of the year is notorious for rallying. You might get some squaring of positions here that has little to do with oil prices,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott. “With slippage again in oil prices, investors are looking through that a little bit and not taking it as a sign of global economic (weakness). … It may be a one-day wonder.”
Brent hit $36.05 a barrel in early morning trade, its lowest since July 2004, and continued to trade about 60 cents lower near that level.
WTI crude futures for January delivery hit a new near-seven-year low. However, the contract expires Monday. The February contract did not touch fresh lows, and traded about 44 cents lower near $35.62 a barrel just before the U.S. market open.
“To me this just has to do with end of the year. Normal seasonal bounce. We’ll see if it can last,” said Adam Sarhan, CEO of Sarhan Capital.
“The market’s oversold. It’s overdue for a bounce. I think it’s more of a rotation going on underneath the surface because leadership is very narrow,” he said.
Analysts also noted some support from the weaker U.S. dollar, which traded mildly lower against major world currencies, with the euro just below $1.09.
The U.S. stock market closes early Thursday, Christmas Eve, and is shut on Friday for Christmas Day.
The only major data out Monday was the Chicago Fed National Activity Index, which declined to minus 0.30 in November from minus 0.17 in October.
U.S. stocks closed sharply lower Friday as investors weighed low oil and economic data in the aftermath of the Federal Reserve’s rate hike Wednesday. Options expiration also contributed to volatility.
With Friday’s late afternoon decline in stocks, the major U.S. averages wiped out gains for the week. Trade volume Friday was the second-highest of the year.
On tap this week:
8:30 a.m.: Chicago Fed National Activity Index
8:30 a.m.: GDP Q3
9 a.m.: FHFA home prices
10 a.m.: Existing home sales
7 a.m.: Mortgage applications
8:30 a.m.: Durable goods
8:30 a.m.: Personal income
10 a.m.: New home sales
10 a.m.: Consumer sentiment
11 a.m.: Oil inventories
Stock market closes at 1 p.m.
8:30 a.m.: Initial claims
10:30 a.m.: Natural gas inventories
Christmas Day holiday
*Planner subject to change.