(Bloomberg) — U.S. stocks rose, briefly sending the Nasdaq Composite Index above 5,000 for the first time in 15 years, while Treasuries slumped and the dollar advanced as gains in consumer purchases signaled strength in the biggest part of the economy.
The Standard & Poor’s 500 Index climbed 0.4 percent at 2:02 p.m. in New York, led by consumer-discretionary companies. The Nasdaq Composite added 0.6 percent. The Stoxx Europe 600 Index retreated 0.2 percent. The yield on 10-year Treasuries rose seven basis points to 2.06 percent. The Bloomberg Dollar Spot Index gained 0.3 percent, while oil in New York climbed 0.7 percent after erasing losses. The yuan fell to a two-year low as China cut interest rates.
The Nasdaq briefly surpassed a level it has exceeded on only seven other days, all of them in March 2000. Consumer purchases adjusted for inflation rose 0.3 percent in January. The Federal Reserve is assessing inflation and employment levels to determine the timing for lifting borrowing costs. Euro-area consumer prices fell less than forecast last month, offering some relief to the region’s central bank as it prepares to put its bond-buying program into action.
“With February as strong as it was, to see some follow- through here is encouraging,” Walter Todd, chief investment officer for Greenwood, South Carolina-based Greenwood Capital, said by phone. “We got some decent data this morning and with numbers out of Europe better than expected and the Chinese central bank cutting rates over the weekend, it’s a combination of those things that have us moving higher.”
Tech Stocks
Global equities from Europe to Asia rallied last month to multiyear highs, while the best month since 2012 for the Nasdaq Composite Index left the technology barometer within striking distance of its dot-com era record. The gauge now stands less than 1 percent below its bubble peak. At its current pace, the index is poised to rise for nine straight quarters, a feat it’s never accomplished.
Momentum is building in stocks that have the fastest profit growth, with companies from Apple to Intel Corp. spending more money than anybody else to buy back shares. While the advance has brought the Nasdaq close to new highs, valuations are only a fraction of where they were 15 years ago.
Unlike the dot-com era, when investors snapped up Internet companies with promise but little profit, today’s gains are built on earnings driven by demand for products such as Apple’s iPhone and Google Inc.’s web-search services.
Positive Earnings
“Probably most people didn’t think it would hit 5,000 again in their life time,” Jason Cooper, a money manager who helps oversee $2.5 billion in South Bend, Indiana, at 1st Source Investment Advisors, said in a phone interview. “The fact that the companies have positive earnings may be why this time could be more constructive.”
Among U.S. stocks moving Monday, Cisco Systems Inc. and Intel Corp. jumped at least 1.9 percent. Visa Inc. rose 1.7 percent after the company struck a deal with Costco Wholesale Corp. to replace American Express Co. as the exclusive issuer for Costco credit cards in the U.S. and Puerto Rico.
Lumber Liquidators Holdings Inc. plunged 25 percent after a television report said the company sold flooring that didn’t meet California health and safety standards. Trading in the stock was delayed at the open.
Data today showed manufacturing expanded in February at the slowest pace in a year as weaker growth abroad limited orders for American-made products.
Economic Data
The 0.3 percent increase in purchases followed a 0.1 percent drop the prior month, a Commerce Department report showed. So-called nominal spending, which doesn’t take into account changes in price, declined 0.2 percent, more than estimated, while incomes grew 0.3 percent for a second month.
The dollar rallied as the economic reports bolstered speculation the Fed will raise interest rates before year-end amid a wave of monetary easing by other central banks.
The greenback rose a third day versus the yen, adding 0.4 percent to 120.11, and was little changed at $1.1186 per euro.
In Europe, bonds of the region’s higher-yielding nations extended gains from last week. Portugal’s 10-year yield declined for a 14th successive day, the longest run on record, to an all- time low of 1.74 percent. Italy’s 10-year yield dropped to a record 1.294 percent.
The central bank may start buying sovereign debt on March 9 as part of its quantitative-easing program, Il Sole 24 Ore reported on Sunday.
QE Focus
“QE is obviously very much the focus currently,” said Daniel Lenz, lead market strategist at DZ Bank AG in Frankfurt. “Especially in the periphery — Spain, Italy and Portugal — there seems to be some confidence that QE will bring spread levels down.”
The Stoxx 600 declined from the highest level in more than seven years as a gauge of oil and gas companies dropped 1.5 percent, the first loss in five days. Royal Dutch Shell Plc and Total SA slid at least 1.3 percent.
The broader index has rallied 14 percent in 2015, its best- ever start to a year, as Greece reached a bailout deal and the European Central Bank announced quantitative easing.
The Shanghai Composite Index climbed 0.8 percent to a five- week high and the Hang Seng China Enterprises Index increased 0.2 percent. A private measure of factory activity in Asia’s largest economy showed a faster-than-estimated expansion Monday as lawmakers prepared to meet for the National People’s Congress in Beijing.
Emerging Assets
Emerging-market currencies fell for a third day after a Chinese interest-rate cut pushed the yuan to a 2012 low and the ruble and Brazilian real led declines in developing Europe and Latin America.
A gauge tracking 20 emerging-market currencies decreased 0.5 percent. The move to join global counterparts with more easing reflects the People’s Bank of China’s concern over an economy pressured by a property slump.
Brent crude retreated from its highest close this year in London on concern a global surplus will linger. U.S. oil futures rebounded after an industry survey was said to report a smaller increase in stockpiles at the main storage hub.
Brent dropped as much as 4 percent. Prices need to fall further before production is sufficiently curbed to balance the market, Goldman Sachs Group Inc. estimates. West Texas Intermediate gained after Genscape Inc. was said to report a smaller inventory increase at Cushing, Oklahoma, according to analysts including Phil Flynn, senior market analyst at the Price Futures Group in Chicago.
Copper prices rose to a six-week high as the interest-rate cut bolstered demand prospects in China, the world’s biggest user of industrial metal. Copper for delivery in three months rose 0.2 percent to $2.6965 a pound in New York. Earlier, the price reached the highest since Jan. 13 on the London Metal Exchange.
Gold futures fell from the highest in almost two weeks as gains for equities cut demand for haven assets. Futures for April delivery dropped 0.4 percent to $1,207.80 an ounce in New York. Earlier, the metal reached $1,223, the highest for a most- active contract since Feb. 17.
Bloomberg