US stocks edge up on mixed global economic data

DANIEL WAGNER AP Business Writer Published:

A positive report on U.S. manufacturing overshadowed concerns about weaker global growth and sent stocks higher Monday.

The Institute for Supply Management said after trading began that its index of manufacturing activity rose strongly this month. A measure of manufacturing employment rose to a nine-month high.

Stocks in the U.S. had opened broadly lower after mixed economic news from China and Europe. European stocks were mixed before the report. Markets on both sides of the Atlantic turned up on the news.

The Dow Jones industrial average rose 69 points to 13,280. The Standard & Poor's 500 index gained 12 to 1,420. The Nasdaq composite index added 25 to 3,116.

The gain came on the first day after stocks' best first quarter in more than a decade. The Dow rose 8 percent and the S&P 12 percent, the best for those indexes since 1998, and the Nasdaq rose 19 percent, its best first quarter since 1991.

Groupon plunged 11 percent on the first trading day after the company said its internal controls are weak and its fourth-quarter loss was bigger than initially reported.

Still, the rally was broad, lifting all 10 of the S&P 500's industry groups. Rising commodity prices bumped materials and energy companies to the strongest gains.

A weaker report on U.S. construction activity helped keep the rally in check. Builders slowed their activity for a second straight month in February, pushing construction spending down by the largest amount in seven months.

The conflicting U.S. economic reports followed disappointing data from overseas.

A survey of Chinese purchasing managers by the bank HSBC slipped, after adjusting for seasonal factors. The survey reflects export activity in China. Its average reading for the first quarter was the weakest in three years.

And a survey of European manufacturing executives by financial data firm Markit fell to a three-month low. It indicated that manufacturing activity there is contracting.

Unemployment in the 17 countries that use the euro has risen to 10.8 percent, according to official figures also released on Monday. That is the highest level of unemployment there since the launch of the euro in 1999, adding to fears about the depth of the recession there.

The nervous tone boosted demand for ultra-safe Treasurys, sending the yield on the 10-year Treasury note down to 2.18 percent from 2.24 percent earlier Monday.

Many traders were looking ahead to the U.S. February jobs report, due out Friday. Economists expect that job creation slowed modestly after three of the strongest months for the labor market since the recession.

European markets soared in their final 90 minutes of trading, after the U.S. factory report was released. France's CAC 40 rose 1.1 percent, London's FTSE 100 gained 1.8 percent and Germany's DAX added 1.6 percent.

In corporate news:

-- Avon Products Inc., which makes hair goo, makeup and watches, leaped 14 percent after the company rejected a $10 billion buyout offer from Coty Inc., a giant German perfume company.

Avon reported a fourth-quarter loss earlier this year and is in the hunt for a new CEO. The company has struggled as it attempts to put behind it an overseas bribery investigation that began in 2008.

-- Express Scripts rose 3 percent after it completed its $29.1 billion acquisition of Medco Health, creating the country's largest pharmacy benefits manager.

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Daniel Wagner can be reached at www.twitter.com/wagnerreports.