Central Bank Optimism Ignites Rally on Wall Street

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U.S. equity markets climbed on Monday as the broad S&P 500 looked to extend its quarterly winning streak to five quarters.

Today's Markets

As of 10:00 a.m. ET, the Dow Jones Industrial Average climbed 147 points, or 0.9%, to 16471, the S&P 500 advanced 15 points, or 0.93%, to 1873 and the Nasdaq Composite rose 45.3 points, or 1.1%, to 4201.

The broad S&P 500 is looking to extend its winning streak to five quarters, posting a small gain for the first quarter of 2014. The five-quarter run would be the longest since 2007, and the sharpest since 2004. Still, it's been a shaky quarter, as evidenced by the Dow likely closing down by more than 1%.

Federal Reserve chief Janet Yellen said in prepared remarks for a speech Monday that “my colleagues on FOMC and I estimate that the unemployment rate consistent with maximum sustainable employment is now between 5.2% and 5.6 percent, well below the 6.7% rate in February.” The dovish remarks helped reverse comments she made suggesting the Fed could start hiking interest rates six months after it concludes its bond-purchasing program.

"Yellen was extremely dovish in her speech today but said nothing new in terms of its translation into their exit from their current policy," Peter Boockvar, chief market analyst at The Lindsey Group, said in a note to clients.

Inflation in the eurozone fell to an annual pace of 0.5% in March from 0.7% the prior month. It was the lowest reading since 2009. Policymakers across the developed world have been worried about very low levels of inflation potentially hindering growth. In Europe, there are even fears that prices could begin falling -- a situation that can be tough for monetary policy to fix.

"Our economists view this as an uncomfortably low number for the ECB, but note that some of the decline may be explained by volatile items such as food (on the mild winter) and base effects owing to the late timing of Easter," economists at Nomura wrote in a note to clients.

"As inflation is expected to bounce back in April, our economists expect the ECB to refrain from cutting rates this week and wait until the April inflation numbers."

Elsewhere on the economic front, the Institute for Supply Management-Chicago’s measurement of manufacturing activity in the U.S. Midwest fell to 55.9 in March, significantly below the 59 Wall Street anticipated, and below the reading of 59.8 the month prior. Readings above 50 point to expansion.

In commodities, U.S. crude oil futures fell 38 cents, or 0.35%, to $101.31 a barrel. Wholesale New York Harbor gasoline dipped 0.82% to $2.914 a gallon. Gold climbed $1.60, or 0.12%, to $1,296 a troy ounce.