January came in with a thud but went out with a bang. Stocks gained on better economic news that should help maintain momentum in economically sensitive sectors such as steel and manufacturing. The Nasdaq Composite led the way, posting a 1.3% gain to 2062.41. The S&P 500 rose 0.9% to 1181.27 and the Dow Jones Industrial Average tacked on almost 63 points, or 0.7%, to 10,489.94. Still, for the month, the Dow lost 2.7%, the S&P shed 2.5% and the Comp slumped 5.2%. Tech stocks got a bounce Monday as investors continued to digest last week's earnings and the Semiconductor Industry Association forecast only a modest decline in first-quarter sales, as expected. The Philadelphia Stock Exchange Semiconductor Index rose 1.6% but finished the month down 4.3%. Weakness in drug stocks and fallout from the SBC ( SBC) bid for AT&T ( T) held back the blue-chip averages Monday. SBC gained only 0.6% and Verizon ( VZ) lost 0.3% while Pfizer ( PFE) fell 0.8%. Airline stocks rose after Merrill Lynch raised its ratings to buy on Continental ( CAL) and America West ( AWA). Delta ( DAL) and AirTran ( AAI) were upgraded to neutral from sell. Continental rose 2.4%, America West flew up 6%, Delta gained 7% and AirTran added 5%. Airlines also were aided by crude oil prices, which fell 1.6% to $46.40 per barrel after OPEC decided to leave production unchanged.
Treasuries held their own despite a bevy of good economic news largely on the strength of one figure. Alan Greenspan's preferred measure of inflation -- the price index for personal consumption expenditures excluding food and energy -- was flat for December from the previous month and rose just 1.5% over the prior year. The yield on the 10-year Treasury note finished just about flat at 4.13%. A more directly bullish, and unscheduled, tidbit appeared on the Bloomberg newswire. It seems that the Canadian agency responsible for calculating imports from the U.S. screwed up and undercounted for at least a portion of the fourth quarter. As a result, Friday's Commerce Department report on U.S. GDP growth for the fourth quarter was mistakenly low as a result.