Wall St. rallies; Nasdaq hits highest level since 2000
The Nasdaq on Monday closed above 5,000 for the first time since the year 2000 dot-com bubble as tech stocks were boosted by deals, while the S&P 500 and Dow indexes hit records after economic data pointed to a slowly accelerating economy.
After oscillating around it for much of the day, the Nasdaq composite index .IXIC gained steam in the late afternoon to finish firmly above the milestone, marking the third time the index ended above 5,000. The last time was March 10, 2000.
"You've an entirely different make-up of stocks. Real earnings and revenue are driving theNasdaq now," said Douglas Depietro, managing director at Evercore ISI in New York. "Anything with a website went to $100 back then."
Its biggest driver on Monday was Google Inc (GOOG.O) and it was boosted heavily by chipmakers NXP Semiconductors NV (NXPI.O) and Intel Corp (INTC.O), as well as network equipment maker Cisco Systems Inc (CSCO.O) after news of two big deals.
Shares of NXP rose 17.3 percent to $99.56 after it agreed to buy smaller peer Freescale Semiconductor Ltd (FSL.N) to create a company valued over $40 billion. Freescale rose 11.8 percent to $40.36.
Hewlett-Packard Co (HPQ.N) said it would buy Wi-Fi gear maker Aruba Networks Inc (ARUN.O) for about $2.7 billion, the biggest deal for the world's No. 2 PC maker since 2011. Rival Cisco 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.
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.
The Dow Jones industrial average .DJI rose 155.93 points, or 0.86 percent, to 18,288.63, theS&P 500 .SPX 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.
"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 LLC in San Francisco.
Lumber Liquidators (LL.N) 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.