Momentum carried stock prices higher again Monday, taking blue chip stock higher for the seventh consecutive session.
The Dow Jones Industrial Average gained 50.22 points to 1,4447.29, the fifth consecutive session the index has closed at a record high. The Nasdaq Composite Index was up 8.50 points to 3,252.87 and the S&P 500 Stock Index rose 5.04 points to 1,556.22, less than 10 points away from its all-time high.
Investors seemed encouraged by growth in China and a growing belief companies are ready to put nearly $2 trillion in cash assets to work in merger and acquisitions to return some of the money to shareholders through dividends and stock repurchases.
Gold rose $1.10 to $1,578 an ounce and oil was up 11 cents to $92.06 a barrel.
Apple Inc. (Nasdaq: AAPL) jumped 1.4 percent, erasing earlier losses. Ford Motor Co. (NYSE: F) added 2.8 percent as deliveries in China jumped. Financial shares rose as Citigroup Inc. (NYSE: C) and Wells Fargo & Co. (NYSE: WFC) climbed at least 1.7 percent.
“The path of least resistance continues to be higher,” Jordan Irving, who helps oversee $175 million at Irving Magee Investment Management in Philadelphia, said in a phone interview. “The latest batch of economic data out of the U.S. was OK. If you’re lagging you might want to try to get a little juice in there to catch up.”
More than $10 trillion has been restored to U.S. equity values during the four-year bull market as the S&P 500 more than doubled from the bottom in 2009, fueled by corporate earnings that topped estimates and monetary stimulus from the Fed. The Dow recouped all its losses from the financial crisis in less than 65 months, more than a year faster than the recovery from the Internet bubble.
The CBOE Volatility Index, which measures the cost of using options as insurance against declines in the S&P 500, dropped 8.2 percent to 11.56 today, the lowest level since February 2007. The gauge, known as the VIX, fell 18 percent last week and is down 36 percent for the year.
Stocks slumped earlier as government data showed China’s industrial production increased 9.9 percent in the first two months of the year, less than the 10.6 percent gain projected in a Bloomberg survey. Retail sales in China rose 12.3 percent, also trailing economists’ estimates, separate figures showed. In the euro area, German exports rose more than economists forecast in January, data showed.
“The fundamentals continue to support a higher stock market,” Eric Green, director of research and fund manager at Penn Capital Management, said over the phone. The Philadelphia- based firm oversees about $7 billion. “In the very short term, is a pullback a possibility? Absolutely. If we get a pullback, likely a lot of people will step in.’”
BlackBerry (Nasdaq: BBRY), formerly known as Research In Motion Ltd., surged 14 percent to $14.90, for the biggest advance in more than a month. Lenovo’s chief executive officer, Yang Yuanqingl, told the Les Echos paper that a deal with Waterloo, Ontario- based BlackBerry “could possibly make sense, but first I need to analyze the market and understand what exactly the importance of this company is.”
Genworth Financial Inc. (NYSE: GNW) soared 6.7 percent to $10.50. The provider of life insurance and mortgage guaranties gained the most in the S&P 500 on speculation the company will benefit from the rebound of the housing market. Scotia Capital upgraded the company two levels to sector outperform, the second-highest of the bank’s four ratings. Barron’s said March 9 the insurer will reward investors.
Boeing Co. (NYSE: BA) rose 2.1 percent to $82.94, the highest level since May 2008. The company said it is boosting monthly airplane production rates for its 737 and 787 programs.
Bloomberg News contributed to this report.
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