Why the Dow Almost Broke 17,000 Today

Boosted by strong economic data, stocks kicked off the second half the year by surging to record highs as the Dow Jones Industrial Average  nearly eclipsed the 17,000 milestone, reaching 16,998 at one point during the session. On the day, the blue chips moved up 129 points or 0.8%, and the S&P 500 also touched a new record, gaining 0.7%. The Nasdaq, meanwhile, jumped 1.1%. 

Economic reports out of both the U.S. and China had investors in a buying mood as Markit's Purchasing Managers Index for June reached 57.3, its highest level since May 2010. The monthly manufacturing report from the Institute of Supply Management was not as strong, as the index edged down slightly from 55.4 to 55.3 in June, below estimates at 55.8. Nonetheless, the index showed the 13th straight month of expansion and new orders and production were particularly high, a leading indicator for future activity. In China, meanwhile, another purchasing managers index showed activity flipping from contraction in May to expansion in June, increasing from 49.4 to 50.7, assuaging concerns about diminishing growth in China. 

Auto sales continued at a strong pace last month as sales industrywide rose 1.2% to 1.4 million in June or an annualized selling rate of 16.98 million. General Motors  shares jumped 3.6% on the news as sales ticked up 1%. The carmaker has been struggling recently with a seemingly endless stream of recalls, which caused sales of a number of affected models, including the Chevy Cruze, Malibu, and Impala to fall significantly last month. Still, overall the automaker didn't seem to be greatly affected by the negative publicity surrounding the recalls. Separately today, a chemical explosion at a GM metal-stamping plant in Indiana killed one worker and injured five. The incident didn't seem to affect the company's stock, but for a manufacturer already struggling with its safety record, news of the explosion will do it no favors.

After hours, Google  was shaking up the online music industry with its purchase of Songza, an Internet radio service similar to Pandora . Shares of Pandora edged down 0.3% after hours on the news. The move gives Google, which did not disclose terms of the deal but was believed to spend just about $15 million, a stake in the burgeoning online radion industry, and follows Apple's $3 billion purchase of Beats Electronics just weeks ago. Songza recommends new songs to listeners, much in the way Pandora, and seems to fit with Google's knowledge-seeking business model. Amazon.com also recently entered the space with its Prime Music service, but Pandora has survived similar threats before, most notably from Apple's iTunes Radio. Despite the activity in the online radio space, the industry may approaching maturity with Pandora and Spotify the leading providers in the U.S. As the tech behemoths hunger for a foothold in the space, Pandora or Spotify could become a juicy acquisition for the big players like Apple, Google, and Amazon.