Dow up 52 as stocks kick off April with solid rally

Updated: 7:54 p.m. ET

Stocks began April with a decent rally, finishing at multiyear highs, but the market ended well off its highs on the day after a new report suggesting that U.S. manufacturing is continuing to grow offset a decline in construction spending.

Technology stocks were generally higher, led by Apple (AAPL), which jumped nearly to $620. Energy shares moved up with oil prices.

But shares of Groupon (GRPN) were off sharply after the company said fourth-quarter sales weren't as strong as reported, and Amazon.com (AMZN) shares fell below $200 for the first time in a week on an analyst downgrade. Avon Products (AVP) shares jumped after rival Coty bid $10 billion for the cosmetics marketer. Avon rejected the bid.

The market came back from early lows as it starts the month and the second quarter. April is historically the best month of the year for the Dow Jones Industrial Average ($INDU). This is a big week of economic reports that includes data on March auto sales Tuesday and will peak Friday when the government reports on unemployment and payroll employment.
 
The Dow closed up 52 points to 13,264, its highest close since Dec. 31, 2007. The close represented a swing of more than 111 points since right after the open, when the blue chips were down as many as 58 points. The blue chips had been up as many as 85 points. The Standard & Poor's 500 Index ($INX) finished up 11 points to 1,419, its best finish since Jan. 9, 2008, and the Nasdaq Composite Index ($COMPX) added 28 points to 3,120 -- its best close since Nov. 15, 2000.

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The Nasdaq-100 Index ($NDX) was up 29 points to 2,784. Apple's gain of $19.08 to $618.63 contributed 16 points, or 55%, to the index's gain.

In a broad rally, there were gains in transportation, bank and energy stocks. There were only a few losing groups: semiconductor, biotech and housing stocks. Volume, however, was light. New York Stock Exchange volume was less than 763 million shares.

The Dow was up 8.1% in the first quarter, with the S&P 500 up 12%, their best first quarters since 1998. The Nasdaq's 18.7% gain was its best first-quarter performance since 1991.

The second quarter is often volatile with strength typically in April. May, however, is the start of the worst six months of the year. In April 2011, the Dow climbed nearly 4% and fell 3.1% in May and June and then kept on falling until the index was down 5.7% for the year.

In 2010, the Dow gained 9.35% total between the end of January and the end of April -- and fell 9.41% in May and June.

Coming Tuesday is the March report on auto and truck sales. Bloomberg News projects auto sales will hit an annualized 14.5 million units, up from 13.1 million units a year ago but off slightly from a 15.1-million-unit sales rate in February. Ford Motor (F), General Motors (GM), Honda Motor (HMC) and Nissan (NSANY) were higher today in New York.

The government will also report on factory orders for March, and the Federal Reserve will release the minutes of its March 13 meeting.

Futures trading suggests a flat open on Tuesday.

Why Apple jumped: Blame it on Brian White
There was a reason for Apple's big gain.

It was because of Topeka Capital's Brian White decides to one-up his many bullish peers by starting coverage with a $1,001 price target. (We're not making this up. He even went on television to explain himself.)

White, who made plenty of positive remarks about Apple while at Ticonderoga Securities, praises Apple's brand for being "able to touch the soul of consumers of all backgrounds." He also thinks China and a TV set could help out some.

He sees Apple selling 11.6 million iPads in the quarter that just ended. But the big growth will come in the fall with the iPhone 5. "We think there's a lot of upside."

A stock price of more than $1,000 isn't unheard of. Berkshire Hathaway's (BRK.A) A shares and meat-processor Seaboard (SEB) closed today at $122,693 and $1,949.50, respectively.

Apple's share are the sixth priciest common shares, after Berkshire Hathaway, Seaboard, travel discount site Priceline.com (PCLN), homebuilder NVR (NVR) and Google (GOOG).

Crude oil, gold rise; so do energy and metals stocks
Energy stocks were higher as crude oil (-CL) settled up $2.21 to $105.23 a barrel in New York. Brent crude was up $1.85 to $125.50. Natural gas (-NG) recovered from early losses, settling up 2.6 cents to $2.152 per million British thermal units.

The retail price of gasoline was $3.925 a gallon, according to AAA's Daily Fuel Gauge Report. The price hasn't changed in four days.

Exxon Mobil (XOM) was up 34 cents to $87.07. Chevron (CVX) added $1.09 to $108.30.

Gold (-GC) settled up $7.80 to $1,679.70 an ounce. Silver (-SI) added 61.4 cents to $33.10 an ounce. Copper (-HG) added 9.6 cents to $3.921 a pound. Metals stocks were higher, with Freeport-McMoRan Copper & Gold (FCX) up $1.07 to $39.11. U.S. Steel (X) rose 89 cents to $30.26.

Interest rates were lower, with the 10-year Treasury yield falling to 2.189% from Friday's 2.216%. The dollar was lower against major currencies.

Energy prices -- New York close
			Mon.			Fri.			Month chg.			YTD chg.
Crude oil (-CL)			$105.23			$103.02			2.15%			6.48%
(per barrel)
Heating oil (-HO)			$3.2496			$3.1701			2.51%			11.51%
(per gallon)
Natural gas (-NG)			$2.1520			$2.1260			1.22%			-28.00%
(per mil. BTU)
Unleaded gasoline (-RB)			$3.3822			$3.3081			2.24%			27.27%
(per gallon)
Brent crude			$125.50			$122.88			2.08%			16.81%
(per barrel)
Retail gasoline			$3.9250			$3.9250			0.00%			19.81%
(per gallon; AAA)

ISM manufacturing gains; construction spending is weak

The pace of growth in manufacturing picked up last month, but construction spending saw its largest drop in seven months in February, pointing to an economy that is healing gradually.

The Institute for Supply Management said its index of national factory activity rose to 53.4 from 52.4 in February, topping economists' expectations of 53.0.

It was a rebound for the sector that in February saw the pace of growth slow unexpectedly. Even so, the forward-looking gauge of new orders was modestly weaker in March, easing to 54.5 from 54.9. But, as Paul Dales of Capital Economics noted, this was more than offset by rises in the production (58.3 from 55.3) and employment (56.1 from 53.2) indices.

The index has been stuck in a tight range in the low 50s since last summer, pointing to steady but slow growth for the sector. Dales' comment: The economy "is ticking along nicely."

Compare that with Europe. The eurozone's manufacturing sector contracted for the eighth straight month in March, with the downturn spreading to core countries Germany and France.

Meanwhile, U.S. construction spending fell 1.1% to an annual rate of $808.86 billion, the lowest level since October as investment in private and government projects fell.

As well, spending in January was revised to show a much bigger 0.8% fall instead of the previously reported decline of just 0.1%. The declines suggest construction will continue to be a drag on the economy.

Coty's bid for Avon

Coty Products offered to buy rival Avon Products (AVP) for $23.25 a share in cash, or about $10 billion. Coty said the proposal is a premium of 27% over the three-month volume-weighted average price for Avon.

Avon rejected Coty’s proposal, saying in a statement that the offer was "opportunistic" and not in its shareholders’ best interests. Avon shares were up $3.34 to $22.70. That suggests some investor skepticism that Avon will be able to find a better offer.

The company has seen earnings declines for three straight years. It has has been roiled by a continuing investigation into allegations of bribery by company executives in China. In December, Avon announced it was seeking a successor for longtime CEO Andrea Jung.

Coty tried three times to get Avon to talk.

Groupon's accounting problems

Groupon, the online deals company, revised its reported fourth-quarter results, saying they were less than reported. Its independent auditor determined it has a "material weakness" in its internal controls. Shares were off $3.11 to $15.28.

Groupon affirmed its first-quarter guidance, reiterating its revenue forecast of between $510 million and $550 million. 

Is Sirius XM Radio a takeover target?

Satellite radio operator Sirius XM Radio (SIRI) is appealing to federal regulators to prevent Liberty Media (LMCA) from taking over the satellite radio company. Shares promptly rose 9 cents to $2.40. 

In a filing with the Federal Communications Commission on Friday, Sirius revealed that Liberty has asked the FCC for permission to take "de facto" control of Sirius. But Sirius asked the FCC to "dismiss or deny" the application, The Wall Street Journal said.

Liberty owns preferred stock that is convertible into about 40% of the outstanding common stock of Sirius.

Starbucks up on China expansion plans; Global Payments sags

Starbucks (SBUX) plans a big expansion of its China business, according to reports. The coffee-shop operator plans to triple its number of stores in China to 1,500 from 500 by 2015, John Culver, the head of Starbuck's China and Asia Pacific business, told The Wall Street Journal. Shares rose 78 cents to $56.67.

Credit card processor Global Payments (GPN) said Sunday night it "identified and self-reported unauthorized access into its processing system." In a press release, the company said hackers accessed its processing system and about 1.5 million card numbers "may have been exported." The company said the breach was confined to North America and believes the incident "is contained." 

Shares were down $1.76 to $45.74. The shares fell 9.1% on Friday. 

A lot of winners

Twenty-six of the 30 Dow stocks were higher, with Alcoa (AA) the bigger percentage gainer, up 15 cents to $10.17. The laggard was Home Depot (HD), down 32 cents to $49.99.

A total of 416 S&P 500 stocks were higher, led by Avon and Tripadvisor (TRIP), and Hartford Financial Services (HIG). The laggards were home builder Lennar (LEN) and Amazon.com.

Meanwhile, 81 Nasdaq-100 shares were higher, led by Nuance Communications (NUAN) and Sirius XM Radio. The laggards were Research In Motion (RIMM) and Amazon.com

Short hits from the markets -- New York close
			Fri.			Thur.			Month chg.			YTD chg.
Treasury yields
13-week Treasury bill			0.0600%			0.070%			-14.29%			500.00%
5-year Treasury note			1.021%			1.043%			-2.11%			23.01%
10-year Treasury note			2.193%			2.216%			-1.04%			17.21%
30-year Treasury bond			3.338%			3.345%			-0.21%			15.54%
Currencies
U.S. Dollar Index			78.963			79.138			-0.22%			-1.94%
British pound			1.6023			1.6018			0.08%			3.12%
(in U.S. $)
U.S. $ in pounds			£0.624			£0.624			-0.08%			-3.03%
Euro in dollars			$1.33			$1.34			-0.32%			2.66%
(in U.S. $)
U.S. $ in euros			€ 0.752			€ 0.748			0.32%			-2.59%
U.S. $ in yen			82.51			82.97			-0.58%			7.01%
U.S. $ in Chinese			6.32			6.29			-0.01%			-0.09%
yuan
Canada dollar			$1.005			$1.005			0.23%			2.40%
(in U.S. $)
U.S. dollar			$0.996			$0.995			-0.23%			-2.35%
(in Canadian $)
Commodities
Gold (-GC)			$1,679.70			$1,671.90			0.47%			7.21%
(per troy ounce)
Copper (-HG)			$3.921			$3.825			2.51%			14.12%
(per pound)
Silver (-SI)			$33.098			$32.4840			1.89%			18.57%
(per troy ounce)
Wheat (-ZW)			$6.5700			$6.6075			-0.57%			0.65%
(per bushel)
Corn (-ZC)			$6.5500			$6.440			1.71%			1.31%
(per bushel)
Cotton			$0.9357			0.9392			-0.37%			2.06%
(per pound)
Coffee			$1.8885			1.85			2.08%			-17.77%
(per pound)
Crude oil (-CL)			$105.23			$103.02			2.15%			6.48%
(per barrel)