New York – Wall Street kicked off the third quarter with a sharp advance Monday as mild manufacturing and construction data lifted hopes about interest rates and energized investors in light preholiday trading.
Stocks saw a solid early start on news of a possible alliance between General Motors Corp. and Nissan Motor Co., although Dow Jones industrial GM slumped ahead of its June sales results.
Colorado stocks rose, led by Newmont Mining Corp. and IHS Inc. The Bloomberg Colorado Index, a price-weighted list of companies with operations in the region, rose 3.64 to 348.03.
Newmont rose $2.59 to $55.52. IHS rose $1.89 to $31.52. Meanwhile, takeover speculation at Alcoa Inc. left the aluminum maker among the Dow’s biggest gainers.
Nationally, a slowdown in monthly manufacturing activity and construction spending was unexpected but nonetheless reinforced views that a moderating economy would keep the Federal Reserve from raising interest rates much further, as did a drop in prices paid by producers.
But with many traders out of the office ahead of Independence Day, analysts said the light trading volume likely exaggerated stocks’ gains. The markets closed at 11 a.m. Mountain time and will be closed today.
“There may be some follow-through reaction on Wed nesday” to the economic reports, said Russ Koesterich, senior portfolio manager at Barclays Global Investments. However, “with this type of volume, you can’t read much into the market’s reactions.”
At the close, the Dow rose 77.80, or 0.7 percent, to 11,228.02. Broader stock indicators also advanced. The Standard & Poor’s 500 index gained 9.99, or 0.79 percent, to 1,280.19, and the Nasdaq composite index surged 18.34, or 0.84 percent, to 2,190.43.
Although Monday’s economic news helped support views that interest rates may have been hiked enough to slow the economy and contain inflation, the Labor Department’s report on employment and wages Friday is more likely to be market-moving, analysts said.
