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Investors try to keep the first-quarter rally rolling

  • Monday's big rally on Wall Street follows the stock market's best first quarter in a decade.
  • The S&P 500 index is within sight of it record high set in September last year.
  • Stock prices have been climbing despite widespread signs of uncertainty over global growth.

Wall Street greeted 2019's second quarter on Monday with a powerful rally that pushed the S&P 500 stock index within sight of its last record high and pulled global stock prices mostly higher on Tuesday. Investors focused on encouraging economic data despite uncertainty over global growth for 2019 and Britain's departure from the European Union.

Monday's action continued the market's upward momentum as it comes off its best quarter in nearly a decade. Financial and tech companies helped power U.S. stocks yesterday. In addition to encouraging data pointing to a brighter outlook on the global economy, long-term Treasury bond yields rose above their recent lows, following a sharp drop last month that had spooked investors.

The S&P 500 gained for the third straight day on Monday, climbing 32.79 points, or 1.2 percent, to 2,867. That put the broad market benchmark within 65 points of its record high of 2,931 set last September and more than 500 points above its pre-Christmas low. The Dow Jones industrials jumped 330 points, or 1.3 percent, to 26,258. The Nasdaq composite climbed 99.59 points, or 1.3 percent, to 7,829.

Benchmarks in London, Frankfurt, Shanghai and Hong Kong gained on Tuesday while Tokyo was flat. Oil prices rose again, adding to Monday's big gains.

Positive data from China and U.S.

Investors were encouraged by unexpectedly strong manufacturing data from China and the U.S. A separate report showed U.S. construction spending increased in February. A better U.S. and Chinese manufacturing outlook "helped ease concerns about slowing global economic growth," Hussein Sayed of FXTM said in a report.

"However, it's still too early to conclude that the U.S. economy has made a U-turn," said Sayed, pointing to weak retail sales. "It's necessary to see an improvement in spending habits to indicate that momentum has started to build up."

The Shanghai Composite index rose 0.2 percent to 3,177 points, and Hong Kong's Hang Seng gained 0.2 percent to 29,625. Tokyo's Nikkei 225 was flat at 21,505, and Seoul's Kospi advanced 0.4 percent to 2,177. On Wall Street, futures for the benchmark S&P 500 and the Dow were trading near flat.

On the downside, British legislators rejected four proposed alternatives to Britain's separation from the European Union that would have softened or halted the departure. With 12 days until the U.K. must come up with a new plan or crash out of the trade bloc in chaos, the House of Commons threw out options designed to replace Prime Minister Theresa May's thrice-rejected deal. The result leaves May with difficult choices including calling a possible snap election to shake up Parliament.

"Yesterday's defeat increased the probability of a no-Brexit deal," said Sayed of FXTM.

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