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Dow, S&P 500 open third quarter with fresh records

Traders work on the floor of the New York Stock Exchange (NYSE) on June 20, 2014 in New York City
Traders work on the floor of the New York Stock Exchange on June 20, 2014 in New York City

Wall Street stocks Tuesday barreled higher to new records, opening the third quarter with big gains following strong US auto sales and Chinese manufacturing data.

The Dow Jones Industrial Average gained 129.47 points (0.77 percent) to 16,956.07, while the S&P 500 shot up 13.09 (0.67 percent) to 1,973.32. Both were record closing highs.

The tech-rich Nasdaq Composite Index bolted 50.47 (1.14 percent) higher to 4,458.65.

Analysts said the market was spurred by data that showed Chinese manufacturing activity expanded in June at the fastest pace of the year and a surprisingly strong batch of US auto sales.

The auto industry sold 1.42 million vehicles in June in the US, well above the Edmunds.com projection of 1.36 million.

"The market has some pent-up demand" after trading sideways for the last week or so, said Art Hogan, chief market strategist at Wunderlich Securities.

Other US economic data was mixed. The Institute for Supply Management's manufacturing purchasing managers index dipped 0.1 point to 55.3 in June, a disappointment next to a forecasted gain of 0.4 point, but well above the 50 reading that separates growth from contraction.

The Commerce Department reported US construction spending in May increased a less than expected 0.1 percent.

General Motors surged 3.6 percent after June auto sales rose one percent from a year ago, the latest indication consumers are not punishing the company over an ignition recall scandal.

Rival Ford Motor slipped 0.2 percent after June sales declined six percent from a year ago, even as they beat the projection by Edmunds.com.

Dow component IBM shot up 2.8 percent. Motley Fool attributed the rise to a report by consultancy Gartner that rated IBM ahead of other technology companies on data security.

Microblogging company Twitter picked up 2.6 percent after it replaced its chief financial officer with former Goldman Sachs banker Anthony Noto.

Video-streaming company Netflix jumped 7.4 percent on an upgrade from Goldman Sachs.

Other technology companies also gained, including Priceline (+3.6 percent), Amazon (+2.3 percent) and GoPro (+20.4 percent), a video camera maker that went public last week.

Bond prices fell. The yield on the 10-year US Treasury increased to 2.56 percent from 2.52 percent Monday, while the 30-year advanced to 3.39 percent from 3.34 percent. Bond prices and yields move inversely.

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