US close: Stocks closes higher as data suggests manufacturing slowdown is easing

Wall Street stocks closed higher on Monday, kicking off the month on a positive note as an unexpectedly strong reading on Chinese manufacturing overnight and some encouraging data back Stateside boosted sentiment.

At the close, the Dow Jones was up 1.27% at 26,258.42, while the S&P 500 was ahead 1.16% at 2,867.19 and the Nasdaq closed 1.29% firmer at 7,828.91.

The Dow closed 329 points higher on Monday, the blue-chip gauge's best percentage gain since 15 February, after Caixin's factory sector Purchasing Managers' Index for China, which was released overnight, rose from a reading of 49.9 for February to 50.8 in March, beating economists' forecast for a print of 50.0.

Commenting on the day's mood, Dean Popplewell, vice-president of market analysis at Oanda said: "Better manufacturing data out of China over the weekend has helped push equity markets into to the ‘black’ on day one of a new quarter. With a plethora of central banks turning more supportive for markets by extending their expansionary monetary policies, a number of investors have been fearful of missing the move."

The yield on the US 10-year Treasury’s climbed eight basis points at +2.496%.

Front month West Texas Intermediate crude oil futures were adding 0.91% to $60.69 a barrel on the ICE, helped by another set of bullish weekly oil rig data in the US.

According to consultancy Baker Hughes, the number of onshore US oil rigs fell by eight during the week ending on 29 March to reach 816.

In company news, Kellogg shares closed 2.37% lower after news broke that it was set to sell its Keebler unit to Ferrero for between $1bn-1.5bn.

Elsewhere, cannabis outfit Cresco Labs shares closed 3.99% higher after announcing its acquisition of Origin House for $823.5m, while Cal-Main Foods was closed 3.05% lower despite topping expectations on the street with its third-quarter figures.

On the data front, total retail sales volumes declined by 0.2% month-on-month to reach $505.97bn, according to the Department of Commerce. Economists had forecast an increase of 0.3%.

However, January's increase in retail sales was revised to show a rise of 0.7% month-on-month, versus an initial estimate showing a growth of 0.2%.

Elsewhere, American manufacturing recovered slightly in March after hitting its lowest point since 2017 a month earlier.

According to the Institute for Supply Management's manufacturing index, manufacturing activity rose to 55.3% in March from 54.2% recorded back in February.

In other news, construction spending increased 1% in February, driven by strong increases in government projects, which hit an all-time high of $303bn.

The February increase followed an even stronger 2.5% gain in January and a slight 0.2% rise at the tail-end of 2018, according to the Commerce Department.

The improvements moved total construction to a seasonally adjusted annual rate of $1.32trn, the highest level since May.

Lastly, US business inventories increased at a higher than expected clip in January, with sales rising moderately despite businesses taking the longest amount of time in almost 18-months to move stock off their shelves.

The Commerce Department revealed that business inventories had crept forward 0.8% in January, while data for December was revised higher to 0.8% instead of the 0.6% increase originally reported.