By Kate Gibson
U.S. stocks surged Monday, with retailers among those rallying
after the Commerce Department said consumer spending and personal
income increased in March, the latter for the first time this
year.
Nearly recouping its 158-point slide on Friday, the Dow Jones
Industrial Average (DJI) was up 154.55 points, or 1.4%, to
11,163.16, with all but two of its 30 components trading higher,
led by Boeing Co. (BA), up 2.7%.
Alcoa Inc. (AA) was the sole decliner among the blue chips, with
shares of the aluminum giant down 2.4%.
The S&P 500 Index (SPX) climbed 16.12 points, or 1.4%, to
1,202.81.
Consumer discretionary and industrial shares led the gains, with
upscale retailer Nordstrom Inc. (JWN) among those rallying, its
shares up 5.7%, after the government estimated U.S. consumer
spending increased to a record high in March. .
Materials proved the only afternoon laggard among the S&P's
10 industry groups.
"The top groups continue to be the most cyclical and tied to the
economic recovery," said Paul Nolte, managing director at Dearborn
Partners.
Industrial stocks have led the market recovery from the
beginning, while "safer" groups like utilities have been weak,
Nolte added.
The Nasdaq Composite Index (RIXF) added 36.16 points, or 1.5%,
to 2,497.33.
For every stock on the decline more than three were rising on
the New York Stock Exchange, where 804 million shares were traded
as of 3:15 p.m. Eastern. Composite volume neared 3.9 billion.
Shares of Transocean Ltd. (RIG) edged up, reversing a slide that
came after BP PLC (BP) said equipment belonging to the rig owner
failed, causing the massive oil spill in the Gulf of Mexico.
Shares of BP were off 4.7%.
Conversely, shares of Nalco Holdings Co. (NLC) jumped 5.1% on
reports its chemicals would be used by BP to help clean up the
slick, while Superior Energy Services Inc. (SPN) climbed 1.2% after
it said it was contacted by BP to supply concrete covers that are
placed over spills.
Other companies with potential roles in the clean up also
gained, with shares of Clean Harbors Inc. (CLH) rising 4% and
Newpark Resources Inc. (NR) shares advancing nearly 14%.
Crude-oil futures rose on the heels of data showing U.S.
manufacturing last month expanded at its most rapid pace since
2004, with the Institute for Supply Management report pointing to
increasing appetite for fuel in the U.S., the globe's largest
energy consumer.
The ISM's index jumped to 60.4% in April from 59.6% the prior
month.
The Commerce Department estimated public spending on
construction projects climbed in March. .
In another signal that corporate America is returning to
deal-making, United parent UAL (UAUA) is acquiring Continental
(CAL) in a stock deal valued at about $3.2 billion. .
Noting that the airline merger comes in the wake of last week's
announcement that Hewlett-Packard Co. (HPQ) would acquire Palm Inc.
(PALM), one analyst noted a positive trend in the spate of
M&A.
"Markets tend to react favorably to these types of deals as they
figure business conditions must be improving and the consolidation
should create even stronger companies," said Andrew Fitzpatrick,
director of investments at Hinsdale Associates.
In a similar vein, Avis Budget Group Inc. (CAR) said it was
preparing to top a competitor's bid for Dollar Thrifty Automotive
Group Inc. (DTG).
Avis' chief executive officer made the statement one week after
Hertz Global Holdings Inc. (HTZ) offered $1.17 billion, or $41 a
share, for Dollar Thrifty.
Greece's debt problems abated some after the European Union and
the International Monetary Fund reached agreement on a $145 billion
rescue plan.