Stocks Gain on Spending, Home Sales 03/30 16:27
Encouraging U.S. economic data and a batch of corporate deals put investors
in a buying mood Monday, sending stocks sharply higher.
(AP) -- Encouraging U.S. economic data and a batch of corporate deals put
investors in a buying mood Monday, sending stocks sharply higher.
The broad rally nudged the Dow Jones industrial average back into positive
territory for the year after a rough stretch for the market most of last week.
Traders welcomed a government report showing that consumer spending and
incomes rose in February. Another report hinted at strong start to the spring
Energy stocks were among the biggest gainers, bucking a slide in the price
of crude oil. Several drugmakers soared on merger news.
"You had all the elements today for a positive market," said Quincy Krosby,
market strategist for Prudential Financial.
The Dow rose 263.65 points, or 1.5 percent, to 17,976.31. The 30-company
index was up as much as 295 points. It's now up 0.9 percent for the year.
The Standard & Poor's 500 index rose 25.22 points, or 1.2 percent, to
2,086.24, while the Nasdaq composite gained 56.22 points, or 1.2 percent, to
4,947.44. Both indexes are also up for the year.
Investors have their eye on economic data as they look ahead to the next
round of corporate earnings, beginning next week. While a clutch of
weaker-than-expected data sent the market lower much of last week, positive
economic news got Monday's rally going early.
In Europe, a survey from the European Commission showed that economic
sentiment across the 19-country eurozone was at its highest level since July
2011. In Asia, Chinese stocks soared on hopes of more economic stimulus.
In the U.S., the government said that consumer spending edged up 0.1 percent
in February following two straight monthly declines, while consumers' incomes
rose a solid 0.4 percent. The National Association of Realtors reported that
its index of pending home sales rose to its highest level since June 2013.
"Today's data suggest that the economy is going to be stronger in the next
quarter starting in April," Krosby said.
Expectations that any increase in the Federal Reserve's key interest rate
this year will be gradual also helped lift the market. On Friday, Federal
Reserve Chair Janet Yellen said in a speech that continued improvement in the
U.S. economy means an increase in the Fed's key interest rate could come later
this year, but would likely be gradual.
"The market takes some confidence in that," said Erik Davidson, chief
investment officer for Wells Fargo Private Bank.
All told, the 10 sectors in the S&P 500 rose, with energy stocks notching
the biggest gain. The sector rose 2.1 percent. It's still down 2.7 percent for
the year. Analog Devices led all stocks in the S&P 500, climbing $5.97, or 10.2
percent, to $64.81.
Investors bid up several health care companies and drugmakers involved in
UnitedHealth Group jumped 2.5 percent after the insurer agreed to buy
pharmacy benefits manager Catamaran. Shares in UnitedHealth Group added $2.99
to $121. Catamaran vaulted 23.8 percent, adding $11.51 to $59.83.
Auspex Pharmaceuticals soared 41.5 percent after it agreed to be acquired by
Teva Pharmaceuticals Industries for about $3.2 billion in cash. Auspex gained
$29.45 to $100.36.
Horizon Pharma climbed 18.2 percent on news it is buying Hyperion
Therapeutics for $1.1 billion. Horizon gained $3.97 to $25.78. Hyperion added
$3.24, or 7.6 percent, to $45.98.
The price of oil fell slightly ahead of Tuesday's deadline for negotiators
to reach a general agreement to curb Iran's nuclear program in exchange for an
easing of sanctions.
If it appears that more Iranian crude could eventually come on the market,
prices could fall. U.S. oil fell 19 cents to $48.68 a barrel. Brent crude, a
benchmark for many international oils imported by U.S. refineries, slipped 12
cents to $56.29 a barrel.
In other futures trading:
-- Wholesale gasoline was unchanged at $1.80 a gallon
-- Heating oil was unchanged at $1.73 a gallon
-- Natural gas rose 0.5 cent to $2.644 per 1,000 cubic feet
Precious and industrial metals futures closed mixed. Gold fell $15 to
$1,184.80 an ounce, silver fell 40 cents to $16.67 an ounce and copper edged up
a penny to $2.78 a pound.
U.S. government bond prices rose. The yield on the 10-year Treasury note
edged down to 1.96 percent from 1.97 percent late Friday.