US stocks opened the second quarter on a higher note, with the S&P 500 hitting a record high, after data on manufacturing indicated economic growth was gaining traction after a harsh winter.
The Institute for Supply Management (ISM) said its index of national factory activity rose to 53.7 in March, its second straight monthly acceleration, from February’s read of 53.2 but below the median forecast of 54.0.
Financial data firm Markit said its final US Manufacturing Purchasing Managers Index slipped to 55.5 in March from 57.1 in February, unchanged from a preliminary reading last week, and the rate of growth and the pace of hiring remained strong.
Construction spending, however, edged up 0.1 percent in February as outlays on private residential construction projects recorded their biggest decline in seven months.
The S&P 500 rose 1.3 percent for the first quarter, matching its longest quarterly winning streak since 2007, buoyed by gains Monday after Federal Reserve Chair Janet Yellen soothed concerns about an earlier-than-expected rate hike.
The Dow Jones industrial average rose 70.94 points, or 0.43 percent, to 16,528.6, the S&P 500 gained 7.88 points, or 0.42 percent, to 1,880.22 and the Nasdaq Composite added 49.098 points, or 1.17 percent, to 4,248.092.
Large-cap technology stocks helped lift the Nasdaq, with Google Inc up 2 percent to $1,136.42 and Microsoft Corp up 1.1 percent at $41.44 – both among the biggest boosts to the Nasdaq 100 index.
Intuitive Surgical Inc jumped 9.1 percent to $477.89 as the best performer on the S&P 500 after the company said the US Food and Drug Administration gave marketing clearance for the company’s da Vinci Xi Surgical System. The NYSEArca biotech index gained 2 percent.
Medicines Co tumbled 14.9 percent to $24.18 in premarket trading. The company said the US District Court of Delaware ruled a generic version of its blood thinner made by Hospira Inc did not infringe two of Medicine Co’s patents. Hospira shares gained 1.5 percent to $43.91.
Europe
In Europe, stocks got off to a brisk start in the second quarter, with merger-and-acquisition activity driving gains by industrial and mining stocks.
Alstom rose 7.2 percent, making it the top performer on the FTSEurofirst 300. The French turbine and train maker said it would sell its heat exchange unit to Triton, a European private equity group.
Finland’s Metso benefited from a report that Britain’s Weir Group was interested in buying its fellow engineering company, surging as much as 21 percent to the top of the STOXX Europe 600 after Weir confirmed the reports were true.
Weir Group fell 2.5 percent, the biggest decline on the FTSEurofirst 300.
Global mining company BHP Billiton was weighing options to simplify its assets, including a possible spin-off of unwanted businesses. Its shares were up 2.3 percent.
The pan-European FTSEurofirst 300 index was up 0.4 percent at 1,339.37 points. Expectations of further economic stimulus by US and Chinese authorities helped to drive the gains. Weakness in China’s manufacturing has led to speculation of government spending to spur growth, boosting demand for basic resources stocks. They gained 0.9 percent to be the region’s top sectoral riser.
US Federal Reserve Chair Janet Yellen said monetary policy would need to remain easy for some time. The comments were seen as more dovish than her first news conference as head of the central bank, when she said that the Fed may raise rates as early as spring 2015, sending stocks lower.
Stocks are usually strong at the beginning of a new month, as investors adjust portfolios and position for the month ahead. But today’s gain looked set to buck a recent losing streak.
The FTSEurofirst 300 has fallen every first trading day of the month since November, after rising on 15 of the previous 18 first trading days.
Asia
Meanwhile, Japan’s Nikkei share average fell, retreating from a three-week high, as sentiment was hit by a sombre business confidence survey and as utilities tumbled on a report that Hokkaido Electric Power Co will get a capital infusion from a state-owned lender.
The benchmark Nikkei dropped 0.2 percent to 14,791.99 in choppy trade after rising as high as 14,870.51 earlier, the highest since March 13.
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