China economic growth sparks markets
Banks rebound as stocks enjoy their best day in weeks
NEW YORK — U.S. stocks bounced back from recent losses Monday after the Chinese government said that country’s economy grew at a slightly faster pace in the first quarter. Banks jumped as interest rates recovered.
After losses in three of the last four weeks, stocks had their best day in more than a month. The largest gains went to industries that would benefit the most from faster global economic growth.
Among banks, the leaders included M&T Bank, which became the latest financial company to report strong first-quarter results. Technology companies were led by chipmaker Nvidia and Google parent company Alphabet, while online retail giant Amazon and streaming video company Netflix also made large gains.
“It was good news to see a positive number coming out of the world’s secondlargest economy,” said Quincy Krosby, market strategist at Prudential Financial. “It was the strongest GDP reading in six quarters, and much of it was based on their infrastructure spending and also the housing market.”
The Standard & Poor’s 500 index climbed 20.06 points, or 0.9 percent, to 2,349.01. The Dow Jones industrial average rose 183.67 points, or 0.9 percent, to 20,636.92. The Nasdaq composite jumped 51.64 points, or 0.9 percent, to 5,856.79. The Russell 2000 index of smaller-company stocks soared 15.94 points, or 1.2 percent, to 1,361.18.
China’s recovering economy grew another 6.9 percent in the first quarter. In 2016 it grew at its slowest pace in almost 30 years, and the government spent more money on construction of infrastructure such as roads and bridges in response.
Relatively cheap credit also boosted property sales, too.
Medical device maker Alere surged after it accepted a modified buyout offer from Abbott Laboratories. Abbott agreed to buy Alere for $56 per share, or $5.8 billion, more than a year ago.
But it filed a lawsuit to end the deal after Alere recalled a key product, delayed filing a financial statement, and faced a Justice Department investigation into its business outside the U.S.
Under the new agreement Abbott will pay $51 a share, or about $5.3 billion, and Alere climbed $6.74, or 15.9 percent, to $49.05.
It had traded as low as $31.47 last July, as investors worried the deal would fall apart after news of the investigation broke. Abbott rose 64 cents, or 1.5 percent, to $43.31. Bond prices slipped. The yield on the 10-year Treasury note rose to 2.25 percent from 2.24 percent. Banks are the worst-performing part of the market recently thanks to sharp declines in bond yields and interest rates.
Benchmark U.S. crude lost 53 cents, or 1 percent, to $52.65 a barrel in New York. Brent crude, used to price international oils, fell 53 cents to $55.36 per barrel in London.
Energy companies lagged the rest of the market.
The dollar fell to 108.59 yen from 109.16 yen.
The euro rose to $1.0642 from $1.0612.