Feb 1 (Reuters) - U.S. stocks were up sharply on Monday afternoon following a steep sell-off last week, with mining shares rising as the retail trading frenzy shifted to silver and as investors weighed prospects for further economic stimulus.
The iShares Silver Trust ETF, the largest silver-backed ETF, jumped 6.7% as silver broke above $30 an ounce for the first time since 2013 with an army of retail traders storming into the metal after betting billions of dollars on stocks last week.
Silver miners Hecla Mining Co, Coeur Mining Inc and Wheaton Precious Metals Corp surged.
U.S. President Joe Biden will meet 10 moderate Republican senators on Monday to discuss their proposal to shrink his sweeping $1.9 trillion U.S. COVID-19 relief package, even as Democrats prepare to push legislation through Congress without Republican support.
“That’s gaining some traction, and I think the market is thinking it’s a good starting point,” said Quincy Krosby, chief market strategist at Prudential Financial in Newark, New Jersey.
Also, “the retail trader focus today seems to be on silver, and it’s considered to be a small pocket of the market,” she said.
Wall Street’s main indexes last week logged their steepest weekly fall since October, as investors digested efficacy data from Johnson & Johnson’s COVID-19 vaccine trial results, and a battle between Wall Street hedge funds and retail investors added to volatility.
The CBOE volatility index eased on Monday from three-month highs that were fueled by a surge in shares of GameStop Corp, AMC Entertainment Holdings and others that burnt hedge funds that had bet against the companies. GameStop was down about 25%, while AMC was up about 6% on Monday.
The Dow Jones Industrial Average rose 317.28 points, or 1.06%, to 30,299.9, the S&P 500 gained 66.71 points, or 1.80%, to 3,780.95 and the Nasdaq Composite added 340.60 points, or 2.61%, to 13,411.29.
Focus also will be on more quarterly earnings reports this week.
The latest ISM survey was mixed as U.S. manufacturing activity slowed slightly in January, while a measure of prices paid by factories for raw materials and other inputs jumped to its highest level in nearly 10 years.
Advancing issues outnumbered declining ones on the NYSE by a 4.15-to-1 ratio; on Nasdaq, a 3.51-to-1 ratio favored advancers.
The S&P 500 posted six new 52-week highs and no new lows; the Nasdaq Composite recorded 93 new highs and 15 new lows.
(Additional reporting by Devik Jain and Medha Singh in Bengaluru; Editing by Maju Samuel and Cynthia Osterman)