BUSINESS

Nasdaq Hits 5,000 Mark For First Time In 15 Years

03/02/2015 03:29 pm ET | Updated May 02, 2015
Bryan Thomas via Getty Images

By Sinead Carew

NEW YORK, March 2 (Reuters) - U.S. stocks advanced on Monday, with the Nasdaq moving above the 5,000 mark for the first time in 15 years, helped by technology deals and mixed data that pointed to a slowly accelerating economy.

The Nasdaq composite index oscillated around the 5,000 milestone after hitting it in the morning for the first time since March 27, 2000, at the height of the dot.com bubble.

It was boosted by chipmakers NXP Semiconductors NV, Intel Corp as well as network equipment maker Cisco Systems Inc after two big deal announcements.

Shares of chipmaker NXP rose 17 percent to $99.35 after it agreed to buy smaller peer Freescale Semiconductor Ltd to create a company valued over $40 billion. Freescale rose 11.7 percent to $40.34.

Hewlett-Packard Co said it would buy Wi-Fi gear maker Aruba Networks Inc for about $2.7 billion, the biggest deal for the world's No. 2 PC maker since 2011. Rival Cisco rose as much as 2.7 percent to $30.31.

"Today we're getting the big boost because of the M&A deals," said Douglas Depietro, managing director at Evercore ISI in New York. "Going forward for the rest of the week, you may see a little pause because people are waiting for the economic data release Friday, because that may give an indication what the Fed's going to do about interest rates."

U.S. consumer spending fell for a second month in January, with lower gasoline prices dampening inflation pressure while personal income fell just short of expectations, showing a rise of 0.3 percent.

Separate gauges of manufacturing were conflicting, as financial data firm Markit's final U.S. Manufacturing Purchasing Managers' Index hit a four-month high while a reading from the Institute for Supply Management fell to its lowest in 13 months. Construction spending also softened, falling at a 1.1 percent annual rate, below expectations calling for a 0.3 percent increase in January.

The Dow Jones industrial average rose 124.27 points, or 0.69 percent, to 18,256.97, the S&P 500 gained 9.84 points, or 0.47 percent, to 2,114.34 and the Nasdaq Composite added 35.38 points, or 0.71 percent, to 4,998.91.

"Money is continuing to pour into the (equities) market because of low interest rates, and although stocks are somewhat expensive they're not overly expensive," said Stephen Massocca, chief investment officer at Wedbush Equity Management LLC in San Francisco.

Lumber Liquidators plunged 22.3 percent to $40.28 after a news report said its products failed to meet safety standards, allegations the hardwood flooring retailer denied.

Advancing issues outnumbered declining ones on the NYSE by 1,698 to 1,344, for a 1.26-to-1 ratio; on the Nasdaq, 1,692 issues rose and 1,032 fell, for a 1.64-to-1 ratio favoring advancers.

The S&P 500 was posting 54 new 52-week highs and 4 new lows; the Nasdaq Composite was recording 133 new highs and 28 new lows. (Additional reporting by Chuck Mikolajczek; Editing by Bernadette Baum and Nick Zieminski)

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