NEW YORK >> Encouraged by news that the manufacturing sector has begun its recovery and that consumers are spending solidly, investors sent stocks surging higher today, propelling the Dow Jones industrials up more than 260 points for their best day in five months. The Nasdaq composite index, meanwhile, scored its best point gain in nearly three months. March madness!
Strong economic reports send
Dow, Nasdaq soaringBy Eileen Alt Powell
Associated Press"The message is very clear: The outlook for the economy is getting better. The news is just very upbeat," said Hugh Johnson, chief investment officer at First Albany Corp.
The Dow Jones industrial average closed up 262.73, or 2.6 percent, at 10,368.86. The last time the Dow racked up more points in a day was Sept. 24, when it rose 368.05. The Nasdaq composite index soared 71.26, or 4.1 percent, to 1,802.75, claiming its biggest point win of the year. The last time the Nasdaq had a larger daily point gain was Dec. 5, when it climbed 83.74. The Standard & Poor's 500 index rose 25.05, or 2.3 percent, to 1,131.78.
Advancers outnumbered decliners 7 to 3 on the New York Stock Exchange, with 2,225 up, 925 down and 191 unchanged. Volume was 1.43 billion shares.
The NYSE composite index rose 10.03 to 588.63, the American Stock Exchange composite index gained 7.20 to 872.78 and the Russell 2000 index, which measures the performance of smaller company stocks, advanced 8.98 to 478.34.
The Treasury's 2-year note fell 732 to 99 2532; its yield rose 12 basis points to 3.12 percent. The 10-year note lost 2632 to 99 632; its yield gained 10 basis points to 4.98 percent. The 30-year bond lost 1732 to 98 632; its yield rose 8 basis points to 5.50 percent.
The sustained advance was a reversal of rallies Wednesday and yesterday morning that fizzled in late afternoon trading to result in stocks closing down both days.
"Investors certainly are reacting to the better economic data," said Barry Berman, head trader for Robert W. Baird & Co. in Milwaukee.
The Commerce Department reported that spending by consumers, which accounts for two-thirds of all economic activity in the United States, rose 0.4 percent in January after being flat in December. The department also said Americans' incomes, which include wages, interest and government benefits, also in- creased by 0.4 percent in January, the largest advance in six months.
Separately, the Institute for Supply Management said its index of business activity rose to 54.7 in February from 49.9 January. It was the first reading over 50, the point signifying expansion, since July 2000. The institute was formerly known as the National Association of Purchasing Management.
Encouraged that an economic recovery was at hand, investors bid stocks higher. Blue- chips gains were widespread, but because their relative safety has kept them pretty stable, analysts were more heartened by the rally in tech stocks.
"It's particularly encouraging to see bull sectors doing the best. Technology, telecommunications and consumer cyclicals are at the top," Johnson said.
Semiconductor stocks rose after chip-equipment maker Novellus Systems said it would beat first-quarter earnings estimates by a penny. Novellus Systems surged 14 percent, up $5.97 at $48.56. Dow industrial Intel climbed $2.43 to $30.98, while Advanced Micro Devices advanced $1.65 to $15.15.
Investors bought shares in auto companies after General Motors announced it was resuming zero-percent financing and Ford said it would extend its program. DaimlerChrysler's Chrysler Group offers low-cost financing and rebates, but has chosen to showcase its powertrain warranty. GM rose $1.99 to $54.97, Ford advanced 76 cents to $15.64 and Chrysler rose $1.62 to $41.50.
Microsoft rose $3.03 to $61.37 a day after the company and the Justice Department announced technical changes to their proposed antitrust settlement.