The ISM said its index of activity in the manufacturing sector rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth in the sector. A PMI produced by the China Federation of Logistics and Purchasing rose to 51.7 from 51.2 in August, after slowing for several months under the onslaught of government measures to rein in credit and deter property speculation. Australias economy, meanwhile, raced higher in the second quarter, notching its fastest growth rate since 2007. Australias second quarter GDP rose 1.2% from the first and 3.3% on the year
Investors jumped on stocks across the market, as stronger-than-expected U.S. manufacturing data renewed optimism about the global economic recovery. Banks and financials led gains as stronger manufacturing growth in the U.S. bolstered confidence, meanwhile stronger base metal prices and better than expected China and US manufacturing data bolstered miners, industrials, and other materials and resources companies. Hike in crude oil prices lifted up energy stocks. Consumer goods were also higher on optimism about the domestic economy.
At the finish bell, the Dow Jones Industrial Average advanced 254.75 points, or 2.54%, to 10269.47, marking its biggest one-day gain since July 7 and its fifth-largest one-day gain this year. The Nasdaq Composite gained 62.81, or 2.97%, to 2176.84. The Standard & Poors 500 index climbed 30.96, or 2.95%, to 1080.29, with all of its sectors ending the session higher.
Entire ten sectors finished well above the boundary line, with Industrials up 3.9%, followed by Financials (3.9%), Energy (3.6%), Consumer Discretionary (3.4%), Materials (2.9%), Tech (2.7%), Health Care (2.3%), Utilities (2.2%), Consumer Staples (1.7%), and Telecom (1.6%).
All 30 Dow component stocks traded higher today, led by Bank of America, which jumped 6.1% to 13.21. Caterpillar was also strong, up 4.6% to $68.16, and J.P. Morgan added 3.8% to $37.74.
In corporate news, Burger King Holdings Inc. jumped 14.7% to $18.86 on reports it could be taken private. Apple Inc. shares rose 3% to $250.33 after CEO Steve Jobs announced a new line of iPods.
On the economic front, The US Manufacturing activity expanded at a faster pace in August, according to a report released by the Institute for Supply Management yesterday. The ISM said its index of activity in the manufacturing sector rose to 56.3 in August from 55.5 in July. A reading above 50 indicates growth in the sector.
The private sector employment in the US showed a drop of 10,000 jobs in August following a downwardly revised increase of 37,000 jobs in July, countering the hopes of an increase, according to the latest data from Automatic Data Processing, Inc. (ADP)
The US Commerce Department stated yesterday that construction spending in the month of July, showing that spending slipped amid decreases in spending on both private and public construction. The report showed that construction spending fell by 1.0% in July following a revised 0.8% decrease in June.
On the commodity front, crude oil prices surged as improvement in the US manufacturing industry eased some fears about the strength of the global recovery. Benchmark oil for October delivery rose $1.99, or 2.8%, to close at $73.91 a barrel on the New York Mercantile Exchange.
The Energy Department said crude stockpiles rose 1% to 361.7 million barrels for the week that ended Aug 27.
Gasoline inventories fell by 200,000 barrels to 225.4 million barrels, which about 10% above year-ago levels. Inventories of distillate fuel, which include diesel and heating oil, fell by 700,000 barrels to 175.2 million barrels.
On the currency front, the dollar slumped against its higher-yielding rivals after positive global economic data encouraged investors to dip into currencies closely tied to global growth.
Treasuries finished lower as the latest batch of global data eased worries about the economic outlook, sapping demand for safe assets. Selling was driven mainly by better-than-forecast increases in the manufacturing sector for both China and the U.S., the two main engines of the global economy.
Powered by Capital Market - Live News
