NEW YORK — Investors sent stocks soaring Monday after getting a boost of confidence from the latest economic reports and Warren Buffett’s defense of Goldman Sachs.
The Dow Jones industrial average rose 143 points for its biggest gain in 2 1/2 months. The Dow and broader indexes all climbed more than 1 percent.
The market rebounded from a drop Friday after a string of welcome news eased some of the concerns that have been dogging investors. Economic reports signaled that consumer spending and manufacturing are strengthening.
Germany’s approval of bailout funds for Greece and Buffett’s vote of confidence in Goldman, whose shares he owns, helped reassure investors. Goldman has been under fire for two weeks after regulators filed civil charges accusing it of fraudulent dealing in mortgage-backed securities.
A United Airlines agreement to acquire Continental in a stock deal worth about $3 billion also lifted stocks. Investors see corporate dealmaking as a positive economic sign.
“The merger in the airlines is great. As you begin to see mergers, that means there is value out there,” said Anthony Conroy, managing director and head trader for BNY ConvergEx Group.
Traders funneled money to retail and restaurant stocks after the Commerce Department said personal spending rose 0.6 percent in March, the biggest increase in five months. Personal income rose 0.3 percent. The reports were in line with analysts’ expectations but showed that consumers used savings to make purchases.
Manufacturing continued to show broad improvement. Orders have been flowing to factories for months while companies rebuild depleted inventories. The Institute for Supply Management said U.S. manufacturing activity expanded last month at the fastest pace in nearly six years.
The Dow rose 143.22, 1.3 percent, to 11,151.83, its biggest point and percentage gain since Feb. 16. The broader Standard & Poor’s 500 index rose 15.57, 1.3 percent, to 1,202.26, and the Nasdaq composite index rose 37.55, 1.5 percent, to 2,498.74.
Goldman Sachs shares rose $4.30, 3 percent, to $149.50 after Buffett said over the weekend that he doesn’t think the investment bank committed fraud. The SEC has accused the company of fraud in a deal involving mortgage-securities deals it set up.
Goldman has denied wrongdoing.
“It is significant that Buffett came out pretty strongly in favor of Goldman Sachs,” said John Apruzzese, partner and equity-portfolio manager at Evercore Wealth Management in New York.
He said some observers will dismiss the defense because Buffett owns shares in Goldman. Still, Buffett is a powerful voice for investors.
