UPDATED: 4 p.m. EST
The Nasdaq Composite Index (INDEXNASDAQ:.IXIC) closed above the psychologically important 5,000 milestone for the first time since March 2000, gaining 44.57 points, or 0.9 percent, to close at 5,008.10. The index climbed as high as 5,008.57 in afternoon trading. The Dow Jones Industrial Average (INDEXDJX:.DJI) gained more than 155.93 points, or 0.86 percent, to close at 18,288.63; the S&P 500 Index (INDEXSP:.INX) added 12.89 points, or 0.61 percent, to end at 2,117.39.
UPDATED: 1:19 p.m. EST
U.S. stocks rallied Monday, with the Nasdaq Composite hitting the psychologically important 5,000 milestone for the first time since 2000, after investors cheered strong U.S. data and China’s interest rate cut over the weekend. The positive gains come ahead of Friday's highly anticipated jobs report for February.
All three major U.S. indices received a boost Monday, with the Dow Jones Industrial Average leaping more than 100 points, after the People's Bank of China cut its benchmark lending and deposit rates by 25 basis points to 5.35 percent after the world’s second-largest economy posted its slowest growth rate since the 1990s last year.
During Monday’s afternoon trading session, the Dow, which measures the share prices of 30 large industrial companies, climbed 112.49 points, or 0.62 percent, to 18,245.19; the S&P 500 stock index added 7.87 points, or 0.37 percent, to 2,112.28.
Meanwhile, the Nasdaq Composite gained 33.64 points, or 0.68 percent, to 4,997.57. The Nasdaq rose as high as 5,001.29 in morning trading, climbing above 5,000 for the first time since March 2000 during the height of the dot-com bubble.
U.S. Consumer Spending Falls In January
Data Monday revealed U.S. consumer spending fell in January as a drop in gasoline prices across America continued to weigh on inflation. Consumer spending, which accounts for nearly two-thirds of U.S. economic activity, declined 0.2 percent in January after falling 0.3 percent in December, the Commerce Department said Monday.
Meanwhile, additional data released Monday showed conflicting reports on the U.S. manufacturing sector after financial information and services firm Markit reported its final Manufacturing Purchasing Managers' Index (PMI) rose to 55.1 in February from 53.9 in January. This marked the manufacturing sector's best gains since October. However, separate data showed the pace of U.S. manufacturing growth fell in February to its slowest in 13 months. National factory activity fell to 52.9 in February from 53.5 in January, the Institute for Supply Management (ISM) said Monday. A reading above 50 indicates expansion in the manufacturing sector.
Despite the mixed reports, Markit said its upbeat survey points to minimal impact from the adverse weather that affected many parts of the U.S. last month. "A flurry of activity towards the month end helped raise production to a greater extent than signaled by the earlier flash reading," Chris Williamson, chief economist at Markit, said in a statement Monday. "The combination of strong production growth, ongoing job creation and rising factory prices will keep alive the possibility that the Federal Reserve could be encouraged to start hiking interest rates as early as June.”
Wednesday: Fed’s Beige Book To Reveal Health Of US Economy
This week, economists are preparing to sort through a slew of data points and earnings announcements that will reveal the overall health of the U.S. economy. The U.S. Federal Reserve is scheduled to release its “Beige Book” Wednesday, to be followed by the government’s monthly jobs report Friday.
Analysts anxiously await the Fed's next Beige Book, which the central bank publishes eight times a year, highlighting the current condition of the U.S. economy within the central bank's 12 districts. The previous Beige Book, published in January, revealed that plunging oil prices since June are beginning to show negative effects in regions that operate heavily within the energy industry, as oil firms reported layoffs and hiring freezes.
Friday: Jobs Report
Looking ahead on the economic calendar, most of the focus this week will be on the U.S. nonfarm payrolls report for February. The report, due Friday, is expected to show U.S. employers added 240,000 jobs in February, down from 257,000 in January, according to analysts polled by Thomson Reuters. The unemployment rate is expected to tick down to 5.6 percent last month after rising to 5.7 percent in January. Average hourly earnings are forecast to increase 0.2 percent and hours worked is expected to hold steady at 34.6 per week.
Here's the latest economic calendar for the week of March 2. All listed times are EST.
- 8:30 a.m. -- Consumer spending (January)
- 8:30 a.m. -- Core inflation (January)
- 9:45 a.m. -- Markit PMI (February)
- 10 a.m. – ISM (February)
- 10 a.m. -- Construction spending (January)
- 10 a.m. Motor vehicle sales (February)
- Australia -- Reserve Bank of Australia interest rate decision
- Canada -- Gross domestic product annualized (Q4)
- 8:15 a.m. -- ADP employment (February)
- 10 a.m. -- ISM nonmanufacturing (February)
- 2 p.m. -- Federal Reserve’s Beige Book
- Canada -- Bank of Canada interest rate decision
- Australia -- Gross domestic product (Q4)
- 8:30 a.m. -- Weekly jobless claims
- 10 a.m. -- Factory orders (January)
- Europe -- European Central Bank interest rate decision
- Europe -- European Central Bank monetary policy statement and press conference
- United Kingdom -- Bank of England interest rate decision
- 8:30 a.m. -- Nonfarm payrolls; Unemployment rate (February)
- 8:30 a.m. -- Trade deficit (January)
- 3 p.m. -- Consumer credit (January)
- Europe -- Gross domestic product (Q4)