U.S. stocks rose on Monday on hopes that China will take further accommodative monetary policy action if needed, while merger deals kept traders focused even as volumes were below average. Energy shares weighed, with declines in Exxon and Chevron keeping the Dow industrials flat while the S&P 500 energy sector was down 1 percent. U.S. crude and Brent fell ahead of an OPEC meeting this week.
Also weighing on the Dow, United Technologies Corp fell 1.4 percent to $108.79. Chief Executive Officer Louis Chenevert retired and is being replaced by the company’s finance chief in an abrupt change. Helping bullish sentiment was expectation central banks will continue to boost equities. Following last week’s surprise rate cut, China’s leadership and central bank are ready to cut interest rates again and to loosen lending restrictions.
“You tend not to cut rates once, it doesn’t happen in a vacuum. This could be the first in a series. The question is, how much they are going to have to do before it works,” said Brian Battle, director of trading at Performance Trust Capital Partners in Chicago. He said the market could continue to drift upwards.