Nasdaq caps best month since 2012 as Apple stock adds US$66 billion

NEW YORK ­— Global equities from Europe to Asia rallied in February to multiyear highs, while the best month since 2012 for the Nasdaq Composite Index left the technology barometer within striking distance of its dot-com era record.

The Nasdaq Composite surged 7.1 per cent, climbing within 60 points of its March 2000 high, as Apple Inc rose 9.6 per cent. The Standard & Poor’s 500 Index increased 5.5 per cent, rebounding from its worst month in a year with the biggest gain since October 2011. The MSCI All-Country World Index added 5.4 per cent after rising to an intraday high on Thursday (Feb 26). The Chicago Board Options Exchange Volatility Index fell 36 per cent for its biggest monthly drop on record.

“What we’re seeing is better signs of economic growth, strong earnings outside the energy and materials sectors,” Michael Strauss, chief investment strategist and chief economist at Commonfund Group in Wilton, Connecticut, said in a phone interview. The firm oversees about US$25 billion (S$34.07 billion). “That’s a support point for Nasdaq, given its lower exposure to energy.”

The Nasdaq is flirting with 5,000 after advancing for 10 straight days through Feb 24, and is now 1.7 per cent from its bubble peak. At its current pace, the index is poised to rise for nine straight quarters, a feat it’s never accomplished.

It has taken two bull markets and more than 4,500 days for the technology index to get close to making up all the ground lost in the dot-com collapse. The S&P 500 and Dow Jones Industrial Average reached all-time highs in October 2007 and again in March 2013.

FRESH RECORDS

Apple, which has the biggest weighting in the Nasdaq, paced gains in February. Avago Technologies Ltd climbed 24 per cent in the month as the semiconductor company agreed to purchase Emulex Corp. Salesforce.com surged 23 per cent as it raised its revenue forecast.

The S&P 500 reached fresh records four times in February, while the Dow average climbed 5.6 per cent for its best month since January 2013. The index also topped its record from December for the first time in 2015.

US stocks climbed to records on Feb 25 as Federal Reserve Chair Janet Yellen said inflation and wage growth remain too low for the central bank to raise rates at its next meeting.

Data showed gross domestic product in the fourth quarter rose at a 2.2 per cent annualized rate. American households picked up spending in the fourth quarter and remained confident in early 2015, indicating the economy is poised to overcome any bumps caused by slower global demand.

Consumer discretionary companies — the stores, restaurant chains and others that depend on disposable income — led gains in the S&P 500 in February with an 8.5 per cent rally.

SPENDING BOOST

TripAdvisor Inc soared 33 per cent, while Priceline Group Inc. rallied 23 per cent as online travel sites advanced amid deal news and speculation the stronger dollar will prod more Americans into overseas trips.

Retailers from Kohl’s Corp. to Coach Inc. and Ross Stores Inc. jumped more than 15 per cent after reporting results that got a boost from the pickup in spending.

An improving job market and generally cheaper fuel probably will help sustain consumer spending, which accounts for almost 70 per cent of the economy.

A gauge of consumer confidence in February fell for the first time in seven months, sliding from the highest level since the start of 2004 amid recent gains in fuel costs and bad winter weather in parts of the US

Energy shares in the S&P 500 advanced 3.5 per cent in February, as US crude oil capped its first monthly gain since June. West Texas Intermediate is still more than 50 per cent lower than its high. Valero Energy Corp and Tesoro Corp rose at least 12 per cent.

CALM PRICES

Central bank easing has combined with speculation that the worst is over for oil to assuage investor concerns and calm stock prices. The VIX plunged 36 per cent in February, the most in records back to 1990, after it jumped as much as 17 per cent in January.

The Stoxx Europe 600 Index rallied 6.9 per cent, extending a seven-year high and pushing gains in 2015 to 15 per cent, as Greece reached a bailout deal and the European Central Bank announced quantitative easing to combat the threat of deflation and jump-start a flagging recovery.

Accommodative central-bank policy from Europe to Japan has spurred gains in global equities even as the US has ended its bond-buying program. The S&P 500 has more than tripled during a six-year bull run on the back of Fed stimulus and a doubling in corporate profits.

Japan’s Topix Index rallied 7.7 to end at the highest level in more than seven years. The gauge has added 8.3 per cent in 2015 amid record stimulus by the Bank of Japan.

Speculation that China’s government will expand stimulus to boost growth sent copper futures to a 7.9 per cent rally, the most since September 2012. Materials companies in the S&P 500 added 7.8 per cent, with Freeport-McMoran Inc, the world’s largest publicly traded copper producer, surging 29 per cent. Martin Marietta Materials Inc. led gains in the group with a 32 per cent surge. BLOOMBERG