The Nasdaq closed above 5,000 for the first time since its dot-com era peak nearly 15 years ago after merger news and an encouraging economic report helped push stocks broadly higher.þþThe major indexes rose from the start on Monday, with the tech-heavy Nasdaq passing 5,000 shortly before noon. It then dropped, before rising to end at 5,008.10, just 40 points from its March 2000 high.þþ“Certainly, the Nasdaq at 5,000 conjures up images of a tech bubble,” said Jack Ablin, chief investment officer at BMO Private Bank. “But we’ve had time for business profits to grow into those crazy expectations 15 years ago.”þþInvestors cheered a report from the government that showed household incomes rose in January, though they spent less than a month earlier. Consumer discretionary stocks rose 1.2 percent on the news, the most of the 10 industry sectors of the Standard & Poor’s 500-stock index.þþ“Today, it’s about the consumer,” said David Joy, chief market strategist at Ameriprise Financial. “Consumers appear to be feeling a little bit better.”þþThe S.&P. 500 closed up 12.89 points, or 0.6 percent, to 2,117.39. The Dow Jones industrial average rose 155.93 points, or 0.9 percent, to 18,288.63. The Nasdaq rose 44.57 points, or 0.9 percent.þþThe broad gains on the first trading day of March came after the best monthly advance for stocks in more than three years. The S.&P. 500 climbed 5.5 percent in February, its biggest gain since October 2011.þþIn deal news, NXP Semiconductors said Sunday that it’s planning to acquire Freescale Semiconductor in an $11.8 billion deal. The merger would create the largest supplier of microchips for cars. NXP’s stock jumped $14.67, or 17 percent, to $99.56. Freescale rose $4.25, or 12 percent, to $40.36.þþBoards of both companies have already approved the deal. Regulators still need to sign off on it.þþIn other deal news, Cardinal Health rose $1.53, or 1.7 percent, to $89.52 after offering to buy a unit of Johnson & Johnson that makes heart devices for approximately $1.94 billion.þþIn the U.S. government report, the dip in consumer spending in January was the second monthly drop in a row. But adjusted for inflation, spending rose. And analysts are expecting the strong income gains will lead to more spending the rest of the year. Household income after taxes shot up 0.9 percent in January, the biggest gain in two years.þþInvestors also were watching developments overseas. The People’s Bank of China cut interest rates for the second time in three months on Saturday, trimming the rate for one-year commercial loans to 5.35 percent. It was the latest measure aimed at propping up growth in China, the world’s second-largest economy. The government has recently cut business taxes and boosted pay for government workers.þþAsian stock markets closed higher, but European indexes were mixed.þþThe Nasdaq is up 5.7 percent this year, the best performance among major U.S. stock indexes. It has been driven by technology and health care stocks, which account for almost two thirds of the index’s market value.þþ“Stocks follow earnings, and both tech and health care have been standouts,” said Jim McDonald, chief investment officer at Northern Trust.þþTech stocks are poised to benefit as companies increase their spending on equipment and software to cut costs and improve productivity. Health care stocks have been climbing as investors bet that biotechnology companies will discover the next blockbuster drug.þþOne stock in particular holds sway over the Nasdaq: Apple. Its market value, about 10 percent of the index’s, has surged to over $750 billion from $22.5 billion in March 2000.þþAmong stocks making big moves on Monday, shares of Lumber Liquidators dropped more than 25 percent to $38.83, its lowest price in two years, a day after a report by “60 Minutes” raised concerns that some of the company’s laminate flooring products made in China had high levels of formaldehyde, a carcinogen. The report said three certified labs concluded the amounts of formaldehyde failed to meet California’s emissions standards.þþIn a Monday filing with the Securities and Exchange Commission, Lumber Liquidators said all of its laminate flooring meets the safety standards set by regulators throughout the U.S. It said doubts about its products were being fueled by “short sellers.”þþIn a separate filing last week, the company disclosed that the Justice Department may seek criminal charges against it under the Lacey Act, which includes a ban on illegally sourced wood products.þþThe auction house Sotheby sank after it posted a big drop in quarterly earnings. Higher expenses weighed on the company’s profits, which came in below analysts’ estimates. Sotheby fell 61 cents, or 1.4 percent, to $43.34.þþIn the bond market, prices for U.S. government bonds fell, pushing yields up. The yield on the 10-year Treasury note rose to 2.09 percent from 2 percent late Friday.þþThe price of oil fell on reports of rising OPEC output, including from a large field in Libya that recently restarted production. Benchmark U.S. crude fell 17 cents to close at $49.59 a barrel in New York. Brent crude, a benchmark for international oils used by many U.S. refineries, fell $3.04 to close at $59.54 in London.þþIn other futures trading on the NYMEX, wholesale gasoline fell 8.1 cents to close at $1.897 a gallon; heating oil fell 8.7 cents to close at $1.887 a gallon; and natural gas fell 3.6 cents to close at $2.698 per 1,000 cubic feet.þþPrecious and industrial metals ended mixed. Gold dropped $4.90 to settle at $1,208.20 an ounce, while silver slipped 11 cents to $16.45 an ounce. Copper picked up a penny to $2.70 a pound.þþ
Source: NY Times
