By: Daniel Wagner, The Associated Press
A positive report on U.S. manufacturing overshadowed concerns about weaker global growth and lifted stocks to multiyear highs Monday. The gain added to the best first quarter for stocks in more than a decade.
The Institute for Supply Management said its index of manufacturing activity rose strongly in March. 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 Standard & Poor’s 500 closed up 10.57 points, or 0.8 percent, at 1,419.04. That was its highest close since May 19, 2008.
“We have solid gains that are likely to be sustained, maybe with some slight pullbacks over coming months,” said Eric Teal, Raleigh, N.C.-based chief investment officer at First Citizens Bancshares, which oversees $4.5 billion. “The manufacturing data continue to show signs of improvement.”
The Dow Jones industrial average added 52.45 points, or 0.4 percent, to close at 13,264.49. It hadn’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.
The S&P 500 rose in the first quarter as economic data surpassed estimates and investors speculated that the euro area would contain its sovereign-debt crisis. The benchmark measure advanced 3.1 percent in March, its fourth straight monthly increase, for the gauge’s longest streak of monthly gains since 2009, as Federal Reserve Chairman Ben Bernanke said he will keep stimulating the economy and Europe agreed to increase rescue funds.
“We don’t see any big negatives that would cause people to run for the hills,” said Joseph Keating, who helps oversee $1 billion as chief investment officer at CenterState Wealth Management in Birmingham, Ala. “Easy monetary policies are in place around the globe. Investor sentiment has picked up.”
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.