Techs End Up, but Blue Chips Falter
Tech stocks relinquished some of their gains but managed to finish higher Monday, as investors took advantage of new economic data that showed U.S. income and spending habits remain strong - fueling hopes the economy can avoid a recession. Blue chips, meanwhile, lost steam and ended lower.
On Monday, the government reported U.S. income growth outpaced spending for the second consecutive month in March. The data comes on the heels of Friday's report on Gross Domestic Product. The Commerce Department said the broad measure of economic activity grew in the first quarter at a 2% annual rate, double analysts' consensus forecasts, boosted by upbeat consumer spending.
"Based on the data we've seen over the past week, I think that the worst is likely over for both the market and the economy," Anthony Maramarco, manager of Babson Value Fund, told Standard & Poor's research unit. "However, I don't really see a dramatic upswing either - I think the economy and market will continue to struggle a bit. Thus, we may be in for an 'extended bottom.'"
Among the stocks in the news on Monday, oil company Phillips Petroleum Co. (P ) said first-quarter profits rose, meeting the range of analysts' lowered expectations, on stronger crude oil and natural gas prices. Shares of Phillips Petroleum ended relatively flat.
The Dow Jones Industrial Average closed down 75.08 points, 0.69%, to 10,734.97. The Nasdaq Composite index added 40.78 points, or 1.96%, to 2,116.46. Meanwhile, the broader S&P 500 slipped 3.57 points, or 0.28%, to 1,249.48.
U.S. Treasuries ended mixed. In economic news, U.S. income growth outpaced spending for the second month in a row in March, according to a Commerce Department report released Monday. The data has boosted prospects consumer spending will help keep a recession at bay. U.S. personal income rose 0.5% in March, and spending was up 0.3%. Additionally, February income was revised higher to 0.5% from 0.3% initially, and spending was revised lower to 0.2% from 0.3%.
European markets ended higher. In London, the Financial Times-Stock Exchange 100 index added 15.50 points, or 0.26%, to 5,966.90. In Germany, the DAX Index was up 89.27 points, or 1.45%, to 6,264.51. In France, the CAC 40 gained 64.06 points, or 1.15%, to 5,640.03.
In Asia, most markets were closed Monday for various holidays. On Friday, the Nikkei shed 38.71 points, or 0.28%, to 13,934.32. In Hong Kong, the Hang Seng added 92.93 points, or 0.70%, to 13,386.04 on Friday.
By Heesun Wee in New York