Another whopper of a rally on Wall Street today as the Dow bolted 304 points, all because investors are becoming increasingly confident that recent bad news means there will no rate hike this year.  Why so many feel this way is a mystery to me as the Fed has already stated quite clearly that all these blips we've been experiencing are just so much "noise" and will not impact the Fed's decision, a decision that will be based on economic factors that are currently very much on target.  They've all but issued a notarized promissory note that there will be a rate hike.  But no one says there's anything rational going on here and Friday's lousy payroll report now has everyone breathing easier, but probably falsely so.  Energy got a 3% boost today which probably helped this rally a lot, but then energy has been depressed and was due for a bump.  Everyone is also still very much expecting a lousy Q3, which is also irrational since they also expected both Q1 and Q2 to be miserable and it didn't happen.  If anything, economic factors are now stronger than earlier in the year so this strong expectation makes even less sense.  Anyway, the day was characterized by what has now become the common catchphrase "irrational exuberance" and this was validated by the above average volume of 7.8 billion shares.

Markets | Mon Oct 5, 2015 6:38pm EDT

Wall Street rises as investors eye rate hike delay, oil up

BY SINEAD CAREW

DJ:  16,776.43  +304.06     NAS:  4,781.26  +73.49        S&P: 1,987.05  +35.69

REUTERS/BRENDAN MCDERMID

U.S. stocks jumped on Monday, with the S&P 500 rising for the fifth day in a row, as rising oil prices boosted energy stocks and investors bet the Federal Reserve would not raise interest rates this year.

The S&P's five-day rise of 5.6 percent was its best five days back to late 2011. Monday saw strong increases in industrials, energy, telecommunications and materials stocks.

Friday's U.S. nonfarm payrolls report for September showed job growth slowed in the last three months, increasing prospects that the era of near-zero interest rates will continue for a while yet.

"Wall Street's favorite movie is nightmare on your street. The missed unemployment number means the Fed is probably going to hold longer," said Stephen Massocca, Chief Investment Officer at Wedbush Equity Management LLC in San Francisco.

The Fed, which has not raised interest rates since June 2006, kept its benchmark rate unchanged in September, citing an uncertain global economic outlook and volatile markets.

Traders are pricing in only a 31-percent chance of a December hike, down from 44 percent before the jobs report, according to CME Group's FedWatch program.

The Dow Jones industrial average .DJI rose 304.06 points, or 1.85 percent, to 16,776.43, theS&P 500 .SPX gained 35.69 points, or 1.83 percent, to 1,987.05 and the Nasdaq Composite.IXIC added 73.49 points, or 1.56 percent, to 4,781.26.

All 10 major S&P sectors closed higher. The top boost for the industrial index's .SPLRCI 3-percent rise was GE (GE.N). It jumped 5.3 percent after Nelson Peltz's Trian Fund Management disclosed a roughly 1-percent stake..

Energy stocks .SPNY jumped 3 percent, boosted by a 1.6 percent rise in U.S. crude oilprices. They were helped by a rally in U.S. gasoline and Russia's willingness to meet other major oil producers to discuss the market. [O/R]

The Nasdaq biotechnology index .NBI fell 0.7 percent, breaking three days of gains. The index was crushed in the previous eight sessions on investor worries about drug price regulations.

The United States and other Pacific Rim countries reached a trade liberalization deal which fell short industry group expectations for drug patent protection.

With third-quarter earnings season starting this week, investors are beginning to factor in what could be the biggest fall in profits for S&P 500 companies in six years. Wall Street expectsS&P 500 companies to report a 4.2 percent decline in earnings, according to Thomson Reuters data.

Advancing issues outnumbered declining ones on the NYSE by 2,734 to 373, for a 7.33-to-1 ratio; on the Nasdaq, 2,187 issues rose and 627 fell for a 3.49-to-1 ratio favoring advancers.

The S&P 500 posted 9 new 52-week highs and no new lows; the Nasdaq recorded 43 new highs and 33 lows.

Volume was strong with about 7.86 billion shares changing hands on U.S. exchanges, above the 7.32 billion average for the previous 20 sessions, according to Thomson Reuters data.