Market Wrap: Rally Pushes Nasdaq to Highest Level Since 2000
NEW YORK -- The Nasdaq closed above 5,000 for the first time Monday since the year 2000 dot.com bubble, as tech stocks were boosted by deals. The S&P 500 and Dow indexes, meanwhile, hit records after economic data pointed to a slowly accelerating economy.
After oscillating around it for much of the day, the Nasdaq composite index gained steam in the late afternoon to finish firmly above the milestone it last reached on March 27 2000, marking only the third time the index closed above 5,000.
"You've an entirely different make-up of stocks. Real earnings and revenue are driving the Nasdaq now," said Douglas Depietro, managing director at Evercore ISI in New York. "Anything with a website went to $100 back then."
The Nasdaq was boosted Monday by chipmakers NXP Semiconductors, Intel (INTC), as well as network equipment-maker Cisco Systems after two big deal announcements.
Shares of NXP (NXPI) rose 17.3 percent to $99.56 after it agreed to buy smaller peer Freescale Semiconductor (FSL) to create a company valued over $40 billion. Freescale rose 11.8 percent to $40.36.
Hewlett-Packard (HPQ) said it would buy Wi-Fi gear maker Aruba Networks (ARUN) for about $2.7 billion, the biggest deal for the world's No. 2 PC-maker since 2011. Rival Cisco (CSCO) rose 2.3 percent to $30.19.
"Going forward for the rest of the week, you may see a little pause because people are waiting for the economic data release Friday, because that may give an indication what the Fed's going to do about interest rates," said Depietro.
Weighing the Economic Data
U.S. consumer spending fell for a second month in January, with lower gasoline prices dampening inflation pressure while personal income fell just short of expectations, showing a rise of 0.3 percent.
Separate gauges of manufacturing conflicted, as financial data firm Markit's final U.S. Manufacturing Purchasing Managers' Index hit a four-month high while a reading from the Institute for Supply Management fell to its lowest in 13 months.
%VIRTUAL-pullquote-Money is continuing to pour into the market because of low interest rates, and although stocks are somewhat expensive they're not overly expensive.%The Dow Jones industrial average (^DJI) rose 155.93 points, or 0.86 percent, to 18,288.63, the Standard & Poor's 500 index (^GSPC) gained 12.89 points, or 0.61 percent, to 2,117.39 and the Nasdaq composite (^IXIC) added 44.57 points, or 0.9 percent, to 5,008.10.
'Not Overly Expensive'
"Money is continuing to pour into the market because of low interest rates, and although stocks are somewhat expensive they're not overly expensive," said Stephen Massocca, chief investment officer at Wedbush Equity Management in San Francisco.
Lumber Liquidators (LL) plunged 25 percent to $38.83 after a news report said its products failed to meet safety standards, allegations the hardwood flooring retailer denied.
About 6.43 billion shares changed hands on U.S. exchanges, compared with the 6.3 billion average for the last five sessions, according to BATS Global Markets.
NYSE advancers outnumbered decliners 1,851 to 1,214, for a 1.52-to-1 ratio; on the Nasdaq, 1,792 issues rose and 960 fell, for a 1.87-to-1 ratio.
The S&P 500 posted 57 new 52-week highs and 4 new lows; the Nasdaq composite recorded 144 new highs and 32 new lows.
-With additional reporting by Caroline Valetkevitch.
What to watch Tuesday:
- Automakers release vehicle sales for February.
These selected companies are scheduled to release quarterly financial results:
- AutoZone (AZO)
- Barclays (BCS)
- Best Buy (BBY)
- Bob Evans Farms (BOBE)
- Dick's Sporting Goods (DKS)
- JD.com (JD)
- Kate Spade (KATE)
- Navistar International (NAV)
- Tri Pointe Homes (TPH)
- TiVo (TIVO)