Stocks Surge to Start Second Quarter
NEW YORK ( TheStreet) -- U.S. stocks rose on the first day of the new quarter, extending the year's winning streak, after data showed that domestic manufacturing continued to improve last month.
The Dow Jones Industrial Average gained 52 points, or 0.4%, to finish at 13,264. The blue-chip index ranged from 13,297 to 13,154 during the session, and is now up 8.6% in 2012.
The S&P 500 gained 10 points, or 0.7%, to close at 1419. The index is up 12.8% year-to-date, its best beginning in more than a decade. The Nasdaq tacked on 28 points, or 0.9%, to settle just shy of 3120.
Stocks dipped at the open, but turned around after data showed that U.S. manufacturing continued to expand in March. The Institute for Supply Management's manufacturing index rose to 53.4 last month from 52.4 in February. Economists according to Thomson Reuters were looking for a level of 53. A reading above 50 indicates expansion.
In a separate report, the Commerce Department said that construction spending fell 1.1% in February, extending a 0.8% decrease in January. The data was disappointing given that economists, according to a Bloomberg survey, were looking for a 0.7% gain in spending, after an originally reported 0.1% loss in January.
After the S&P 500 has pushed ahead by 12% during the first quarter, market-watchers are growing cautious about what the second quarter has in store for the market. Corporate earnings growth is expected at 3.2% for the first quarter, an estimate that's come down in the past few months, according to Thomson Reuters .
The consensus was looking for cumulative growth of 10.2% from S&P 500 member companies in October 2011, when this rally began, but analyst estimate cuts and a high number of negative pre-announcements have pushed the forecast lower. First-quarter earnings season will begin in earnest in mid-April, when the big banks start reporting.
The unsolicited bid values Avon shares at $23.25 each, a premium of 21% to Friday's close at $19.36. Avon's board set aside the offer from Coty, saying it was similar to an overture made by the company less than two weeks ago and that it doesn't feel the deal is in the best interests of shareholders. Avon's stock jumped 17.2% to close at $22.70.
Amazon.com shares slid Monday after Bank of America Merrill Lynch downgraded the stock to neutral , saying a "protracted" investment cycle may weigh heavier on the online mega-retailer's bottom line than expected. The stock lost about 2% to $198.05.