* S&P 500 closes at record, discretionary names rally
* Ford shares advance after strong March auto sales
* Medicines Co tumbles after court ruling
* Indexes up: Dow 0.5 pct, S&P 0.7 pct, Nasdaq 1.6 pct
(Updates to close)
By Ryan Vlastelica
NEW YORK, April 1 U.S. stocks rose for a third
straight session on Tuesday, with the S&P 500 ending at a record
close, after positive data on factory activity indicated
economic growth was gaining traction following a harsh winter.
Gains were broad, with areas of the market closely tied to
the pace of economic growth among the day's leaders. Consumer
discretionary stocks rose 1.4 percent while technology
shares were up 1.3 percent.
Among other groups, the PHLX housing sector index
rose 1.6 percent and the Nasdaq biotechnology index added
2.1 percent. The Dow Jones Transportation index rose 0.9
percent to a record.
The Institute for Supply Management (ISM) said its index of
national factory activity rose to 53.7 in March, its second
straight monthly acceleration. However, the report was below the
median forecast of 54.0.
The ISM report was the latest to point to improving economic
conditions, giving credence to the theory that soft data earlier
this year was due to weather and not weakening fundamentals.
"There's a whiff of spring in the economic data, which means
we're starting the second quarter with signs that the economy is
maintaining the kind of reasonable growth that will continue to
support the market," said Jim McDonald, chief investment
strategist at Chicago-based Northern Trust Global Investments,
which has about $884 billion in assets under management.
"I'm comforted by the rise in discretionary and homebuilding
stocks, since those are the ones that really show economic
strength. Meanwhile the rise in biotech shows improved risk
Ford Motor Co jumped 4.6 percent to $16.32. U.S. auto
sales rose more than expected in March, following two months
when demand was hampered by weather.
General Motors Co dipped 0.2 percent to $34.34,
although its March sales also topped forecasts. Mary Barra, the
company's chief executive, told a House Energy and Commerce
subcommittee GM has retained Kenneth Feinberg as a consultant to
gauge possible responses to families of those injured or killed
in crashes involving recalled cars.
Among tech names, Google Inc rose 1.8 percent to
$1,134.89 and Microsoft Corp added 1 percent to $41.42.
Both were among the biggest boosts to the Nasdaq 100
index, which rose 1.7 percent. Shares of Cisco Systems
jumped on heavy volume, up 3.9 percent to $23.10 as the biggest
advancer on the Dow.
The Dow Jones industrial average was up 74.95 points,
or 0.46 percent, at 16,532.61. The Standard & Poor's 500 Index
was up 13.18 points, or 0.70 percent, at 1,885.52. The
Nasdaq Composite Index was up 69.05 points, or 1.64
percent, at 4,268.04.
The S&P 500 has gained for three straight sessions, up about
2 percent over that period.
About 69 percent of stocks traded on the New York Stock
Exchange closed higher on Tuesday while 72 percent of
Nasdaq-listed shares ended up. About 6.41 billion shares traded
on all U.S. platforms, according to BATS exchange data.
Financial data firm Markit said its U.S. Manufacturing
Purchasing Managers Index slipped to 55.5 in March, unchanged
from a preliminary reading, but the rate of growth and the pace
of hiring remained strong.
Construction spending edged up 0.1 percent in February,
curbed by a drop in private residential projects.
Intuitive Surgical Inc jumped 12.7 percent to
$493.60 as the best performer on the S&P 500. The U.S. Food and
Drug Administration gave marketing clearance for the company's
da Vinci Xi Surgical System.
Medicines Co tumbled 15.5 percent to $24.02. A U.S
District Court ruled a generic version of its blood thinner made
by Hospira Inc did not infringe two of Medicine Co's
patents. Hospira shares gained 2.4 percent to $44.27.
After the market closed, shares of Apollo Education
fell 3.7 percent following its results.
(Editing by Bernadette Baum and Nick Zieminski)