Optimism on economy a broad boost for Wall Street

By Leah Schnurr

NEW YORK (BestGrowthStock) – U.S. stocks (Read more about the stock market today. ) rose broadly on Monday as data showed the economy’s recovery remained on track, and details of a European financial rescue package for Greece provided a measure of relief.

The U.S. manufacturing sector grew in April at its fastest pace in almost six years, according to an industry report, while the government reported an unexpected rise in construction spending in March, marking the first advance since October.

The manufacturing data helped boost shares of big manufacturers in the Dow index, including Caterpillar Inc (CAT.N: ), up 2.7 percent at $69.94, and 3M Co (MMM.N: ), up 1.5 percent to $89.98.

“It’s more good economic news, and that’s what can keep the rally going,” said Scott Marcouiller, senior equity market strategist at Wells Fargo Advisors in St. Louis.

“It’s a very broad rally, but volume is very low today, which makes it easier to make things look better.”

Major stock indexes rose 1.4 percent or more in midafternoon trading, building on gains from a deal in Europe to provide a fiscal aid package to Greece.

Over the weekend, European countries agreed to a 110 billion euro ($146.5 billion) package for debt-laden Greece, the biggest ever financial bailout of a country. The agreement provided relief to Wall Street investors, but in the currency market, investors fretted whether Germany would secure parliamentary approval to release the money by a mid-May deadline, driving down the euro.

Sentiment was also buoyed after UAL Corp (UAUA.O: ), the parent of United Airlines, said it agreed to buy Continental Airlines Inc (CAL.N: ) for $3.2 billion in stock in a deal that would form the world’s largest airline.

UAL shares rose 1.9 percent to $22.01, and Continental Airlines rose 1.9 percent to $22.77.

The Dow Jones industrial average (.DJI: ) gained 162.34 points, or 1.47 percent, to 11,170.95. The Standard & Poor’s 500 Index (.SPX: ) rose 16.93 points, or 1.43 percent, to 1,203.62. The Nasdaq Composite Index (.IXIC: ) was up 40.69 points, or 1.65 percent, at 2,501.88.

Data that showed consumer spending rose in March for a sixth straight month also lifted the market. Consumer spending, which accounts for about two-thirds of U.S. economic activity, has remained one of the most fragile aspects of the economy and investors are eager for signs of growth.

The Nasdaq fared better than the other two indexes, helped by a more than 2 percent gain in Apple Inc (Read more about Apple stock future.) (AAPL.O: ) after the company said sales of its iPad since the tablet computer’s April launch passed the 1 million milestone faster than expected. Apple shares were up at $267.59.

U.S.-listed shares of BP Plc (BP.L: ) (BP.N: ) were among the most heavily traded stocks on the New York Stock Exchange, falling 5.8 percent to $49.15. The energy giant promised to pay for the cleanup and compensation claims for a catastrophic oil spill threatening the U.S. Gulf shore and said it was working to stem the undersea leak.

Billionaire investor Warren Buffett on Sunday stood by his feisty defense of a controversial mortgage transaction marketed by Goldman Sachs Group Inc (GS.N: ) that is at the center of government fraud charges against the bank. Buffet said the investment bank’s behavior does not warrant public fury. Goldman Sachs shares rose 3.4 percent to $150.11.

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(Editing by Padraic Cassidy)

Optimism on economy a broad boost for Wall Street