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Nasdaq back in black for '15, Dow up 304

Adam Shell
USA TODAY

Stocks kicked off the week in rally mode with the Dow jumping 304 points Monday as investors view a Federal Reserve interest rate hike this year as less likely after Friday's weak jobs report raised questions about the pace of U.S. growth.

Traders Edward Curran, left, and Robert Arciero work on the floor of the New York Stock Exchange, Friday, Oct. 2, 2015.  (AP Photo/Richard Drew)

The Nasdaq composite jumped back into positive territory for the calendar year on its 1.6% gain, a climb of 73 points. Up 1.8% and posting its fifth straight winning day was the S&P 500.

Both the Dow and S&P 500 remain in the red for 2015, even after the Dow's powerful 1.9% gain Monday .

Employers added just 142,000 jobs in September

For the second straight month, the U.S. economy created less than 200,000 jobs in September -- and fell shy of expectations -- a weak reading that prompted Wall Street to scale back its expectations for a coming rate hike. The so-called lower for longer interest rate bet looks like it is back in vogue.

"The market expectation for Fed lift-off was delayed furrther," Barclays told clients in a note before Monday's opening bell on Wall Street. Citing trading in futures, Barclays said the market now sees the first rate hike in the second quarter of 2016. The delay in lift-off has -- at least for the moment -- taken away a big uncertainty for financial markets in 2015, as most expected a hike last month and some time later this year.

The blue-chip Dow posted its first back-to-back 200 point gains since Aug. 26-27 and if the third 200-point gain out of the last four sessions.

A rally in risk assets, which began on Wall Street late Friday, spread across the globe Monday. Shares of Japan's Nikkei 225 rose 1.6% and the Hang Seng index in Hong Kong rallied 1.6%.

European shares also shot up. The broad STOXX Europe 600 index was 2.9% higher. Local stock markets also gained. The CAC 40 in Paris surged 3.6%, the DAX in Germany jumped 2.7% and London's FTSE 100 shot up 2.8%.

The market could be setting up for a fourth-quarter rally after a tough stretch, says Ari Wald, a technical strategist at Oppenheimer.

Which 7 stocks tend to blast the competition in the 4th quarter

Wald notes that the S&P 500 came within 5 points of its August panic lows, but was able to stay above that key technical level. Investors, Wald says, "should be positioning for a fourth-quarter rally based on extremely pessimistic sentiment conditions and improving seasonals."

A relief rally could come from the fact that bullishness on Wall Street is very low and, therefore, "should provide contrarian firepower as the emotional pendulum swings back toward optimism in the coming months."

Wald says the S&P 500 could climb back up towards its average price of the past 200 days, or 2060. The broad index closed Friday at 1951, which means the market has 5.6% upside from current levels, according to Wald's forecast.

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