NEW YORK, May 31: Stocks jumped and the dollar rose against the euro, but bonds slid on Friday, as a pick-up in manufacturing in the Midwest bolstered optimism about sturdy US economic growth later this year.

The Dow Jones industrial average and the Standard & Poor’s 500-stock index both ended May with gains for three months in a row for the first time since late 2001. The technology-loaded Nasdaq composite index strung its first four-month winning streak since the second half of 1999, at the height of the tech bubble.

The market continues to forecast better economic conditions again, and the feeling is that you have to be long stocks, said Peter Cardillo, chief strategist and director of research at Global Partners Securities.

Business expanded in Midwestern states in May for the first time since February, according to the National Association of Purchasing Management-Chicago index, suggesting improvements in manufacturing as well as the broader economy.

The report, regarded as a precursor to a national manufacturing report on Monday, added fuel to the rally which has lifted the Nasdaq, S&P 500 and Dow about 25 per cent, 20 per cent and 17 per cent, respectively, since mid-March.

The Chicago Purchasing Managers number is very encouraging because it confirms the post (Iraq) war economic bounce that the market is counting on to sustain this rally, said Milton Ezrati, senior economic strategist at Lord Abbett & Co.

The Nasdaq composite rose 20.96 points, or 1.33 per cent, to 1,595.91, ending at its highest level in a year. The S&P 500 climbed 13.95 points, or 1.47 per cent, to 963.59, its highest close since early July. The blue-chip Dow jumped 139.08 points, or 1.60 per cent, to 8,850.26, its highest close this year.

For May, the Dow rose 4.4 per cent, the S&P 5.10 per cent and the Nasdaq gained 8.99 per cent.—Reuters