U.S. stocks traded higher Monday, the first day of the new quarter, as Wall Street scored an apparent boost from better-than-expected economic reports here and in China, momentarily allaying fears of flagging economic growth.
How did the benchmarks fare?
The Dow Jones Industrial Average
DJIA, +1.01%
jumped 236 points, or 0.9%, to 26,158, on pace for its best daily gain since Feb. 15, according to FactSet data. Meanwhile, the S&P 500 index
SPX, +0.90%
climbed 23 points, or 0.8%, to 2,858, with the financial sector gaining 1.8% and the index’s industrials sector advancing 1.7%. The Nasdaq Composite Index
COMP, +1.01%
gained 70 points, or 0.9%, to 7,800.
What’s driving the market?
Upbeat global economic reports in the U.S. and China are helping to foster a strong start for to the second quarter.
Read: How much the stock market still lags other assets when it comes to making up lost ground
On Monday, the Institute for Supply Management’s manufacturing index showed that activity in the sector accelerated, coming in at a stronger-than-expected 55.3 in March versus a two-year low of 54.2% a month earlier. A reading above 50 indicates an expansion in activity.
The hotter-than-expected U.S. data followed the Caixin China manufacturing purchasing managers index, which rose to 50.8 in March from 49.9 in February, rebounding to expansionary territory for the first time in four months. Gains for the private gauge came on the heels of China’s official manufacturing PMI released on Sunday, which rose to a six-month high of 50.5 in March from 49.2 in February.
However, a reading of the eurozone’s manufacturing sector showed its struggles continuing, as Markit’s eurozone PMI fell to a below-consensus 47.5, indicating contraction. Meanwhile, U.S. retail sales figures were also disappointing, as the government reported that consumers spent 0.2% less in February than in January, continuing a trend of thriftiness that has economists expecting subdued economic growth in the first quarter.
Read: Why the markets aren’t buying the Fed’s claims about the strength of the U.S. economy
Friday’s bullish session for stocks and end to the first quarter was partly driven by fresh hopes for a trade deal between the U.S. and China, after Treasury Secretary Steven Mnuchin tweeted that “constructive” discussions between China’s trade envoy and U.S. officials.
On Sunday, China’s State Council said it would suspend additional tariffs on U.S. autos and auto parts, in a bid to help “create a good atmosphere for the continuing trade negotiations between both sides,” according to Reuters. Talks will resume in Washington on Wednesday, with a Chinese delegation led by Vice Premier Liu He.
What are strategists saying?
“Ignoring some ropy retail sales data, the Dow Jones joined its European peers in a hopeful, sunny start to the second quarter,” wrote Connor Campbell, financial analyst with Spreadex. “Driven by the better than forecast Chinese manufacturing PMIs from overnight, alongside the lingering optimism surrounding the trade talks that are set to continue in Washington this week, the Dow jumped more than 200 points as April got underway…to its best price in close to 5 months.”
See: Stock market at crossroads after strongest quarterly rise in a decade
“World markets are rallying on the first trading day of a new week, month, and quarter, propelled upward by positive readings on the world economy. China-sensitive markets have been leading the charge with Shanghai soaring…” wrote Colin Cieszynski, chief market strategist at SIA Wealth Management, in a Monday research note.
What other data were released?
U.S. construction spending rose 1% in February, building on a 2.5% January gain, the Census Bureau said Monday. Economists surveyed by MarketWatch had forecast a 0.1% decline.
The Commerce Department reported that business inventories rose 0.8% in January, the second month in a row stockpiles grew at that rate.
Markit issued its final reading of its March manufacturing index for the United States, which fell to 52.4 from a 53.0 reading in February. The index is less closely watched by U.S. investors than the ISM data.
Which stock are in focus?
Popular exchange-traded fund U.S. Global Jets ETF
JETS, +1.01%
rose 1.8% on Monday as shares of air carriers were in focus Monday, after the Federal Aviation Administration said several airlines were experiencing outages of a flight planning program called Aerodata, which is used to weigh cargo. The issue has since been resolved, the FAA said on Twitter.
Southwest Airlines Co.
LUV, +1.34%
Delta Air Lines Inc.
DAL, +0.70%
United Continental Holdings Inc.
UAL, +1.53%
JetBlue Airways Corp.
JBLU, +1.86%
and Alaska Air Lines Group Inc.
ALK, +1.75%
were all said to be affected.
Roku Inc.
ROKU, +7.40%
stock rose 6.5% Monday, after KeyBanc Capital Markets analyst Evan Wingren raised his target price on the stock to $76 from $63.
Shares of Cal-Maine Foods
CALM, -4.16%
fell 0.5%, after the egg producer and distributor reported fiscal third-quarter earnings that beat Wall Street expectations.
Eastman Kodak Co.’s
KODK, +3.36%
stock could be in focus ahead of the company’s quarterly earnings report, set to be released after the market close.
Shares of Lyft Inc.
LYFT, -10.03%
were down 11.2% early Monday after the ride-hailing company made its debut as a publicly listed company on Friday, with a gain on that day of 8.7%.
Kellogg Co. shares
K, -1.74%
were falling 1.7% as the company announced a plan to sell its Keebler, Famous Amos and fruit snacks units to Ferrero in a deal worth between $1 billion and $1.5 billion.
How did the major benchmarks perform last week?
On Friday, the Dow rose 211.22 points, or 0.8%, to 25,928.68, while the S&P 500 index gained 0.7% to 2,834.40. The Nasdaq Composite Index advanced 0.8% to 7,729.32.
DJIA, +1.01%
The S&P 500 closed out the week with a 1.2% gain, a 1.8% monthly rise and a first-quarter advance of 13.1%, the best quarterly performance since the third quarter of 2009.
How are other markets trading?
Apart from hefty gains for China stocks, the rest of Asian markets rose, with the Nikkei 225 index
NIK, +1.43%
rose 1.4%, while Korea’s KOSPI index
SEU, +1.29%
rose 1.4%.
In Europe, stocks were on the rise, with the Stoxx Europe 600 adding 1.2% Monday.
U.S. crude prices
CLK9, +1.93%
were advancing, while gold
GCM9, -0.32%
eased up, and the ICE Dollar Index
DXY, +0.06%
also fell.
Barbara Kollmeyer contributed to this article
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Source : MTV
