View Mobile Site
 

Ask the Expert

Signal Photos

 

US stocks rise on strong economic data

Posted: November 1, 2012 11:58 a.m.
Updated: November 1, 2012 11:58 a.m.
 

U.S. stocks rose strongly Thursday following positive reports about manufacturing and consumer confidence, two keys elements of the economic recovery.

Manufacturing expanded for the second straight month in October, boosted by growth in new orders and production, the Institute for Supply Management said. U.S. factories had slowed down June through August, according to the ISM, a trade group of purchasing managers.

The Conference Board said Americans' confidence in the economy surged last month to the highest level in nearly five years. Many were encouraged by an improving job market, the group said.

Both reports landed a half-hour after trading began, pushing the Dow Jones industrial average up as much as 177 points.

Traders cheered the manufacturing growth because it tends to signal higher corporate earnings, said Doug Cote, chief market strategist at ING Investment Management. U.S. companies are midway through reporting their third-quarter earnings, which have been relatively weak. If factories keep boosting their output, Cote said, earnings are more likely to bounce back in the fourth quarter.

"What you want to see is advancing corporate profits, broad manufacturing growth and strong consumer spending," Cote said. Cote said those factors, along with corporate earnings, set the tone for the market.

Also setting the tone Thursday was anticipation of the Labor Department's October jobs report, which is due out on Friday. Before trading began, the government said new applications for unemployment benefits fell 9,000 last week to a seasonally adjusted 363,000, a level consistent with modest hiring. Separately, payroll provider ADP said businesses added 158,000 jobs in October.

Those data are a warm-up for Friday's overall survey of the job market. The report will be watched closely by traders seeking clues about how well the U.S. economy is recovering. If the number is especially good or bad, it also could influence the outcome of next week's presidential election.

The Dow was up 131 points at 13,227 at 1 p.m. Eastern. The Standard & Poor's 500 index added 14 to 1,426. The Nasdaq composite index rose 39 to 3,016.

Stocks were already higher in early trading following encouraging corporate news and the jobs reports. The Dow was up more than 100 points before the consumer confidence and manufacturing readings gave it an added boost.

It was the second day of trading after Superstorm Sandy ravaged New York and forced markets to close on Monday and Tuesday. Companies that had postponed earnings announcements rushed to release their results.

The combination of better news on the economy and U.S. companies set stocks on a positive course a day after the Dow closed out its first monthly loss since May.

The upswing started with strong sales results from retailers and automakers. Chrysler had its best October in five years, with sales rising 10 percent, despite the three-day disruption caused by the storm.

Exxon Mobil beat the financial expectations of analysts surveyed by FactSet, but reported lower production of oil and gas. Its stock fell 32 cents to $90.85.

Kellogg Co.'s net income edged up in the third quarter as its acquisition of Pringles chips earlier this year paid off. Kellogg leapt $1.08, or 2 percent, to $53.40.

Pfizer said its third-quarter profit fell 14 percent on plunging sales, mainly due to new competition from generic forms of Lipitor, long the world's top-selling drug. Pfizer fell 38 cents to $24.49.

___

Daniel Wagner can be reached at www.twitter.com/wagnerreports.

Copyright 2012 The Associated Press.

 

Comments

Commenting not available.
Commenting is not available.

 
 

Powered By
Morris Technology
Please wait ...