Stocks jump to kick off October after jump in Chinese manufacturing activity; rise in spendingBy Stephen Bernard, AP
Friday, October 1, 2010
Stocks rise ahead of ISM manufacturing report
NEW YORK — U.S. stocks rose Friday as signs of strong manufacturing growth in China drove markets higher worldwide.
The Dow Jones industrial average rose 77 points in early morning trading.
China’s key reading on manufacturing activity jumped in September from August, relieving concerns that growth in the world’s second-largest economy is slowing. China has been relied upon to pick up global demand as the U.S. economy remains sluggish.
Traders in the U.S. will get their own reading on domestic manufacturing activity later Friday. The report often sets an early tone for trading each month. Investors could be slightly more optimistic about the manufacturing data after a report Thursday showed manufacturing activity in the Chicago area rose in September.
Economists polled by Thomson Reuters forecast the Institute for Supply Management’s manufacturing index fell to 54.5 last month from 56.3 in August. Any reading above 50 indicates expansion in the sector.
A much stronger than expected ISM report a month ago helped kick off a rally that drove stocks to their best September performance since 1939.
Major indexes were also getting a lift after personal income and spending both rose more than expected in August. Income jumped 0.5 percent in August and spending rose 0.4 percent. Economists were expecting both to rise 0.3 percent.
Increased spending could be a sign that the economy might start to be gaining a bit more strength. Consumer spending is a primary driver of economic growth.
The Dow rose 76.67, or 0.7 percent, to 10,864.72 in early morning trading.
The Standard & Poor’s 500 index rose 8.76, or 0.8 percent, to 1,149.96, while the Nasdaq composite index rose to 19.96, or 0.8 percent, to 2,388.58.
Traders will also get a final reading on consumer sentiment. A final reading of the University of Michigan/Reuters consumer sentiment index is likely to indicate a drop in confidence last month.
Tags: Asia, China, East Asia, Greater China, Manufacturing Sector Performance, New York, North America, United States