News from AAP

US stocks kick off second quarter with a nice bounce

Print This Post A A A

US stocks have started the second quarter on a high note after US manufacturing data picked up more than expected, a sign of stronger growth in the feeble recovery.

The Dow Jones Industrial Average added 52.45 points (0.40 per cent) on the first trading day of the quarter to finish at 13,264.49.

The broad-based S&P 500 advanced 10.43 points (0.74 per cent) to 1,418.90, while the tech-rich Nasdaq climbed 28.13 points (0.91 per cent) to 3,119.70.

On Friday, stocks ended the first quarter with record point-gains in the period for the S&P 500 and the Dow blue chips. The Dow rose 8.1 per cent over the period, the blue-chip index’s best first quarter since 1998.

Sentiment was supported Monday by “a report showing US manufacturing accelerated at a rate above economists’ forecasts,” Charles Schwab analysts said.

“The upbeat US report is highlighting a plethora of global manufacturing reports, and is offsetting mixed data out of China and contraction in the eurozone.”

Signs of weakness in Europe set a negative tone early in the session.

Eurozone manufacturing activity dropped to a three-month low in March, with the weakness spreading to top economies Germany and France, a key survey showed.

But there was better news from the United States and China, helping to underpin sentiment.

China said Sunday that manufacturing activity last month hit its highest level in a year, tempering recent concerns of a sharp slowdown in the world’s number-two economy.

However a separate survey by HSBC bank showed PMI falling for a fifth straight month.

In the United States, manufacturing accelerated in March, according to the ISM index. The widely watched measure rose from 52.4 per cent in February to 53.5 per cent last month.

“ISM manufacturing survey data offer further encouraging news that the sector continued to expand at a robust pace at the end of the first quarter,” said Chris Williamson, chief economist at Markit.

Alcoa led the Dow’s gainers, up 1.4 per cent, followed by Boeing, up 1.1 per cent.

Door-to-door beauty products giant Avon Products Inc. jumped 17.3 per cent to $22.70 after rejecting a $10 billion takeover bid – or $23.25 a share – from privately held US rival Coty.

Bond prices edged higher. The 10-year Treasury yield fell to 2.19 per cent from 2.2 per cent late Friday. The 30-year yield fell to 3.34 per cent from 3.35 per cent.

Bond prices and yields move in the opposite direction.