Good news on manufacturing buoys stocks
The Dow rose 52 points to close at 13264 as a positive report on U.S. manufacturing lifted stocks to multi-year highs Monday. The Dow close was its highest since 2007.
A positive report on U.S. manufacturing overshadowed concerns about weaker global growth and lifted stocks to multi-year highs Monday. The gain added to the best first quarter for stocks in more than a decade.Skip to next paragraph
Subscribe Today to the Monitor
The Institute for Supply Management said that its index of manufacturing activity rose strongly this month. A measure of manufacturing employment rose to a nine-month high.
Stocks in the U.S. and Europe had tilted negative but rose after the ISM report. The S&P 500 closed up 10.43 points, or 0.7 percent, at 1,418.90. That was its highest close since June 10, 2008.
The Dow Jones industrial average added 52.45 points, or 0.4 percent, to close at 13,264.49. It hasn't closed that high since the last day of 2007. The Nasdaq composite average gained 28.13, or 0.9 percent, to 3,119.70.
From January through March, the Dow rose 8 percent and the S&P 12 percent, the best first quarter for those indexes since 1998. The Nasdaq rose 19 percent, its best first quarter since 1991.
Groupon plunged 17 percent on the first trading day after the company said its internal controls are weak and its fourth-quarter loss was bigger than initially reported.
Still, the rally was broad, lifting all 10 of the S&P 500's industry groups. Rising commodity prices gave materials and energy companies some of the strongest gains.
A weaker report on U.S. construction activity kept traders' enthusiasm in check. Builders slowed their activity for a second straight month in February, pushing construction spending down by the largest amount in seven months.
The conflicting U.S. economic reports followed mixed data from overseas.
Surveys of Chinese factory executives shaded an uneven picture: A government-sanctioned report said that manufacturing there gained momentum for a fourth straight month.
Later, a survey of European manufacturing executives by financial data firm Markit fell to a three-month low. The result indicated that manufacturing activity there is contracting.
Europe's statistics bureau said that unemployment in the 17 countries that use the euro has risen to 10.8 percent, the highest level since the launch of the euro in 1999.
The nervous tone boosted demand for ultra-safe Treasurys, sending the yield on the 10-year Treasury note down to 2.19 percent from 2.24 percent earlier Monday.
Trading on the New York Stock Exchange was lighter than average. Many traders looked ahead to the U.S. March jobs report, due out Friday. Economists expect that job creation slowed modestly after three of the strongest months for the labor market since the recession.
European markets soared in their final 90 minutes of trading after the U.S. factory report was released. France's CAC 40 rose 1.1 percent, London's FTSE 100 gained 1.8 percent, and Germany's DAX added 1.6 percent.
In corporate news:
Avon reported a fourth-quarter loss earlier this year and is in the hunt for a new CEO. The company has struggled as it attempts to put behind it an overseas bribery investigation that began in 2008.
— Express Scripts rose 2 percent after it completed its $29.1 billion acquisition of Medco Health, creating the country's largest pharmacy benefits manager.