By Anora Mahmudova and Sara Sjolin, MarketWatch
Consumer spending falls in January
NEW YORK (MarketWatch) -- U.S. stocks struck a positive note for
the start of March, with a rally on Monday lifting the Nasdaq
Composite above 5,000 -- a level not reached since 2000 for the
tech-heavy index -- while the S&P 500 and the Dow Jones
Industrial Average scored records of their own.
The record-setting day for the major indexes came amid economic
reports on Monday that pointed to a slowdown in manufacturing
activity as well as consumer spending. However, investors brushed
off slightly disappointing data, seemingly content with the fact
the U.S. economy is still growing, albeit, at a more modest
clip.
Consumer spending
(http://www.marketwatch.com/story/consumers-spend-less-save-more-at-start-of-2015-2015-03-02)
in January fell more than expected, while the saving rate rose as
Americans chose to pocket their savings from cheaper gasoline
(http://www.marketwatch.com/story/incomes-surge-spending-doesnt-whats-going-on-2015-03-02).
Meanwhile, the widely-watched Institute for Supply Management's
manufacturing gauge
(http://www.marketwatch.com/story/ism-manufacturing-gauge-slows-to-529-in-february-2015-03-02)
slowed in February, but was in line with expectations.
Construction spending
(http://www.marketwatch.com/story/january-construction-spending-drops-11-2015-03-02-1091643),
which fell unexpectedly in January, proved one big
disappointment.
A survey of purchasing managers showed the final February
reading on the index was raised from the flash reading.
Much of the buzz on Wall Street centered on the Nasdaq Composite
(RIXF). which added 44.57 points, or 0.9%, to 5,008.10 on Monday.
The tech-heavy index has closed above 5,000 only twice before in
2000 and is only one percentage point away from its all-time record
reached on March 10, 2000.
The index gained 5.7% since the start of the year, thanks to a
17% gain in its heaviest-weighted component Apple Inc. (AAPL)
"Nasdaq's reaching a round number 5,000 and 5,050, which was a
record, are serving like magnets to investors. Double all-time
highs in large-caps and small-caps last week are also boosting
confidence," said Sam Stovall, U.S. equity strategist at S&P
Capital IQ.
Meanwhile, the S&P 500 (SPX) scored its own record high, the
fifth this year, adding 12.89 points, or 0.6%, to 2,117.39. The
consumer discretionary sector led the gains, while energy stocks
took a hit as oil prices swung wildly.
The Dow Jones Industrial Average (DJI) jumped 155.93 points, or
0.9%, to 18,288.63, also scoring its fourth record-high close this
year.
The Russell 2000 (RUT) gained 9.1 points, or 0.7% to 1,242.47,
also hitting a record.
Colin Cieszynski, chief market strategist at CMC markets, said
that it is encouraging to see markets go up despite slightly weaker
data.
"Today's action in the market is a sign of confidence. People
are confident the economy is doing well. While today's data were
below expectations, misses were mild. The drop in construction
spending can be explained by harsh winter weather," Cieszynski
said.
Stocks to watch: Shares of GoPro Inc. (GPRO) fell 4.9% after
Chinese smartphone company Xiaomi launched a wearable action camera
that offers many of the features of GoPro's Hero camera, but
retails at half the cost.
Shares of a Visa Inc. (V) got a lift after Costco Wholesale
Corp. (COST) struck a co-branding credit-card agreement with the
company. Visa gained 2.6%, while Costco closed 0.7% higher.
NXP Semiconductors NV(NXPI) jumped 17% and Freescale
Semiconductor Ltd.(FSL) gained 12% after the two companies
announced a merger with that will create a $40 billion company
(http://www.marketwatch.com/story/nxp-freescale-agree-to-merge-2015-03-02).
Shares of Lumber Liquidators Holdings Inc.(LL) plunged 25% after
the retailer of hardwood flooring was linked to toxic chemicals on
"60 Minutes"
(http://www.cbsnews.com/news/lumber-liquidators-linked-to-health-and-safety-violations/).
Goodrich Petroleum Corp.(GDP) slumped 12% after the oil and gas
producer said it has started a public offering of 12 million shares
to repay debt and for other purposes.
For more on notable movers, read Movers & Shakers column
(http://www.marketwatch.com/story/berkshire-hathaway-qualcomm-mylan-in-focus-2015-03-01).
In other markets: In a surprise move, the People's Bank of China
on Saturday lowered the benchmark
(http://www.marketwatch.com/story/story?guid=%7BC27BAEEA-5F05-42CD-939E-3B9DA0B4A35E%7D)
one-year loan to 5.35% and the one-year deposit rate to 2.5%, both
cut by a quarter of a percentage point. The central bank signaled
in a statement that a looming threat of deflation was a trigger for
the rate cut. Asian markets closed mostly higher on Monday
(http://www.marketwatch.com/storyno-meta-for-guid).
10-year Treasury yields
(http://www.marketwatch.com/story/treasury-yields-tick-up-as-core-inflation-rises-2015-03-02),
which move inversely to prices, climbed 6.4 basis points to 2%, as
a measure of U.S. core inflation met expectations.
Oil prices
(http://www.marketwatch.com/story/wti-crude-slips-back-by-the-close-2015-03-02)(CLJ5)
were volatile and settled with a modest loss. West Texas
Intermediate settled at $49.59 while Brent crude settled at $59.54,
narrowing the price spread between them. Gold futures
(http://www.marketwatch.com/story/heavy-economic-data-flow-set-to-tweak-gold-2015-03-02)(GCJ5)
reversed earlier gains and logged their first loss in four session,
settling at $1,208.20. The dollar (DXY) traded mixed against other
major currencies.
European stock markets ended largely lower
(http://www.marketwatch.com/storyno-meta-for-guid), even as data
showed inflation rose to negative 0.3% in February from negative
0.6% in January, while the currency union's unemployment rate
dropped to the lowest since 2012
(http://www.marketwatch.com/story/eurozone-jobless-rate-falls-to-lowest-since-2012-2015-03-02).
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