By CCN.com: The Dow and broader U.S. stock market extended their relief rally into the new trading week, as plunging consumer prices in the Eurozone bolstered expectations for a new round of quantitative easing from the European Central Bank (ECB).
Dow Vaults Past 26,000; S&P 500, Nasdaq Follow
All of Wall Street’s major indexes traded sharply higher Monday, mirroring a strong pre-market for Dow futures. The Dow Jones Industrial Average jumped 249.78 points, or 1%, to 26,135.79.
The broad S&P 500 Index of large-cap stocks advanced 1.2% to 2,923.65. All 11 primary sectors reported gains, led by energy.
The technology-focused Nasdaq Composite Index was back above 8,000, climbing 1.4% to 8,002.81.
Eurozone Consumer Prices Plunge in July
Eurozone consumer prices slid into negative territory last month, underscoring a weak economic recovery that should give central bankers enough scope to expand their stimulus program.
The consumer price index (CPI) fell 0.5% in July, slightly worse than expected, Eurostat reported Monday. Annual inflation was 1%, down from 1.3% in June.
Core consumer prices, which strip away volatile goods such as food and energy, plunged 0.6% during the month. The June CPI rate was revised sharply lower to reflect a decline of 0.6%. It was originally reported as a 0.4% increase.
ECB officials target annual inflation at just under 2%. The more the headline reading falls below that level, the more scope officials have in re-introducing new stimulus measures, such as quantitative easing.
Eurozone gross domestic product (GDP) expanded 0.2% in the second quarter, but Germany, its largest member state, contracted.