Stocks are rallying

Stocks are rebounding on Monday morning after Friday’s close in the red.

Near 9:40 a.m. ET, the Dow was up 116 points, the S&P 500 was 32 points higher, and the Nasdaq was up 8 points.

Friday’s sell off left the Dow down 289 points one day after the Federal Reserve opted to keep interest rates unchanged on concerns about global economic growth and low inflation.

Over the weekend, we highlighted comment from Societe Generale’s Kit Juckes, noting that the so-called “easy money” — plump returns on assets boosted by quantitative easing — is going to be a lot more difficult to come by from now on.

And in a note Monday, Bank of America Merril Lynch’s Savita Subramanian wrote that “the Fed is helping so much it hurts”, and the biggest threat to stocks would be a fourth round of quantitative easing, or QE4.

Still, BAML maintained its year-end S&P 500 target of 2,100, which it lowered a week ago from 2,200.

Crude oil is rallying, and West Texas Intermediate crude oil futures in New York rose 2% to as high as $US46.39. WTI fell more than 5% on Friday.

The economic data docket today is light, with existing home sales expected at 10:00 a.m. ET. Economists estimated a month-on-month decline for August.

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