S&P starts the quarter on a four-year high
US stocks started the second quarter with a bang yesterday, with the S&P 500 climbing to a fresh four-year high as manufacturing data from the United States and China helped support the outlook for economic growth.
A string of mixed indicators in recent days slowed the stock market’s advance, as investors took the figures as signs that the recovery was leveling off.
The US Institute for Supply Management’s index of national manufacturing activity rose to 53.4, exceeding forecasts. China’s Purchasing Managers’ Index, meanwhile, hit an 11-month high.
“Some were concerned that the first-quarter data was only strong because the weather this winter was mild … but the ISM suggests that the strength is a little more than anticipated,” said Mark Luschini, chief investment strategist at Janney Montgomery Scott in Philadelphia. “In addition, China’s PMI takes some of the concern of a hard landing out.”
The data helped lift energy and basic materials stocks as crude oil and commodity prices climbed. Chevron rose one per cent to $108.30. The S&P’s index of materials stocks advanced 1.4 per cent, while Alcoa led the Dow up with a 1.5 per cent gain to $10.17.
Beauty company Coty offered to buy cosmetics direct seller Avon Products for $23.25 a share, a 20 per cent premium over Friday’s closing price. Avon jumped 17.3 per cent to $22.70.
The Dow Jones industrial average added 52.45 points, or 0.40 per cent, to 13,264.49 at the close. The Standard & Poor’s 500 Index rose 10.43 points, or 0.74 per cent, to 1,418.90. The Nasdaq Composite Index gained 28.13 points, or 0.91 per cent, to 3,119.70.
For the S&P 500, yesterday marked its highest close since mid-May 2008. The Dow scored its highest finish since 31 December 2007, while the Nasdaq once again finished at levels not seen since late 2000.
Apple helped lift the Nasdaq, rising 3.2 per cent to $618.63, while Home Depot limited the Dow’s advance by falling 0.6 per cent.