Nasdaq ends above 5,000 amid downbeat economic data, Chinese rate cut

In this May 16, 2012 file photo, a taxi passes in front of the Nasdaq MarketSite in New York's Times Square.[Photo/IC]

NEW YORK - US stocks surged to close at record highs Monday, with the Nasdaq Composite Index above the round-number mark of 5,000 points for the first time since March 2000, as investors meditated on downbeat economic data and an interest rate cut in China.

The Nasdaq went up 44.57 points, or 0.90 percent, to close at 5,008.10. The tech-heavy index set its all-time high of 5,132.52 points on March 10, 2000, and closed at a record of 5,048.62 points on the same day.

The Dow closed at its all-time high of 18,288.63 points, up 155.93 points, or 0.86 percent, setting its fourth closing record for 2015.

The S&P 500 ended at its fifth record close for the year, up 12.89 points, or 0.61 percent, to 2,117.39.

Growth in the US manufacturing sector gathered momentum in February, according to financial data firm Markit Monday. The final seasonally adjusted Markit US Manufacturing Purchasing Managers Index (PMI) rose to 55.1 in February from 53.9 in the previous month, its highest level since October 2014.

However, according to a report released by the Institute for Supply Management Monday, the February PMI registered 52.9 percent, a decrease of 0.6 percentage point from January's reading of 53.5 percent.

In January, personal income increased 0.3 percent, missing market consensus of 0.4 percent, while personal spending fell 0.2 percent, said the US Commerce Department Monday. In the United States, consumer spending accounts for more than two-thirds of the country's economy activity.

"The most important news in today's income and consumption data was the sharp fall in prices. When real spending can increase 0.3 percent despite a 0.2 percent drop in nominal spending, it puts consumers in a very good place indeed, where savings are growing at the same time real consumption growth is strong," said Chris Low, chief economist at FTN Financial, in a note.

Analysts also expected that relatively soft economic data might make the Federal Reserve stay accommodative for longer to begin raising rates.

Adding positive sentiment to the market, the People's Bank of China, the country's central bank, on Saturday announced that it would cut the benchmark deposit and loan interest rate by 25 basis points (bps) starting March 1.

Asian stocks increased broadly following China's rate cut Monday, with Chinese benchmark Shanghai Composite Index rising 0.78 percent to finish at 3,336.28 points.

In corporate news, Berkshire Hathaway is in focus following the release of Warren Buffett's annual investment letter and the company's latest earnings. Dipping to $4.16 billion from $4.99 billion a year earlier, Berkshire posted a 16.7 percent decline in the fourth quarter net profit over the weekend.

Buffett said it was likely that although Berkshire would outperform other companies in the future, its size may make it impossible to equal past gains.

Shares of Berkshire Hathaway fell 0.37 percent to $220,365 apiece Monday.