Dow pops 329 points on China manufacturing data

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Why US stocks may fall in the second quarter

“The Bubba Show” host Todd Horwitz discusses the state of the U.S. stock market.

Major stock averages closed sharply higher Monday, beginning the second quarter with robust gains on strong China manufacturing data and optimism about U.S.-China trade prospects.

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All three major equity averages are now up three days in a row, and the blue-chip Dow Jones Industrial Average notched its largest one-day point and percentage gain since Feb. 15, 2019.

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The Chinese government statistics bureau said Sunday its monthly purchasing managers' index (PMI) rose to 50.5 on a 100-point scale on which numbers above 50 show activity rising -- up 1.3 points from February.

In addition, China's Caixin/Markit Manufacturing PMI unexpectedly rose to 50.8 versus forecasts it would hold steady at 49.9. Like the official government report it’s also the first reading above 50 since November, in addition to being the strongest growth since March.

Both reports eased worries about an economic slowdown in China, particularly after some recent disappointing data on industrial output.

TickerSecurityLastChange%Chg
I:DJIDOW JONES AVERAGES26949.99+14.92+0.06%
SP500S&P 5002991.78-0.29-0.01%
I:COMPNASDAQ COMPOSITE INDEX8112.461954-5.21-0.06%

U.S.-Chinese trade talks were due to resume in Washington after a round in Beijing last week that U.S. Treasury Secretary Steven Mnuchin described as "constructive." Prospects of a resolution to the trade conflict between the world's two largest economies buoyed investor sentiment.

Chinese and American officials are aiming to put to rest a dispute over technology and other issues. Chinese Vice Premier Liu He is expected to travel to Washington next week.

The S&P climbed to its highest level since Oct. 10, 2018. Bank stocks paced gainers.

TickerSecurityLastChange%Chg
LNCLINCOLN NATIONAL CORP.60.90+0.17+0.28%
PNCPNC FINL SVC141.20+0.32+0.23%
JPMJP MORGAN CHASE & CO.118.88-0.02-0.02%
BACBANK OF AMERICA CORP.29.52-0.07-0.24%

The Institute for Supply Management said its U.S. manufacturing index for March rose to 55.3, up from 54.2 in February.

Meantime, a surprise drop in retail sales underscores the slowdown in U.S. economic growth, a factor that should keep the Federal Reserve on an accommodative path.

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Japan's Nikkei 225 index rose 1.4 percent to 21,509.03, easing off earlier highs after economic data showed conditions for manufacturers deteriorating. The Shanghai Composite index popped 2.6 percent to 3,170.36 and Hong Kong's Hang Seng increased 1.7 percent to 29,554.74.

European shares were climbing despite bad economic reports there, with Germany's DAX gaining 1 percent to 11,645. The CAC40 in France advanced 0.5 percent to 5,378 and Britain's FTSE 100 rose 0.6 percent to 7,324.

The Associated Press contributed to this report.