Associated Press | A flurry of upbeat economic reports sent the
Dow Jones industrial average rose more than 100 points in midday
trading. Other indexes logged similar gains as energy
stocks led the market higher following a strong earnings report from
Exxon Mobil.
The stronger reports on manufacturing activity and personal incomes
helped shore up the market’s sentiment after three straight losing
weeks that left stocks with a loss for January. Investors were already
becoming more optimistic thanks to news on Friday that the economy grew
at the fastest pace in six years in the final three months of 2009.
Major indicators started higher and kept the momentum up through midday
trading. The Dow Jones industrial average rose 80 points, and other
indexes logged similar gains. Energy stocks led the market higher
following a strong earnings report from Exxon Mobil.
In economic news, U.S. manufacturing activity grew for a sixth straight
month in January to the strongest level since August 2004, according to
the Institute for Supply Management. The trade group said factories
increased production as customers replenished inventories.
The ISM’s manufacturing index jumped to 58.4 in January from 54.9 in
December. Analysts polled by Thomson Reuters had expected a level of
55.5. Any reading above 50 signals growth.
Meanwhile, the Commerce Department said consumer spending increased by
0.2 percent in December, its third straight monthly gain. The
government also said personal income increased more than expected in
December.
“The economy and the recovery seem to be on track. The GDP number on
Friday and the ISM number today confirm that,” said Kevin Shacknofsky,
portfolio manager of the Alpine Dynamic Dividend Fund in Purchase, N.Y.
The government reported last Friday that the U.S. economy grew at an
annual rate of 5.7 percent in the final three months of 2009, a pace
far stronger than economists had forecast.
The positive signals in the economic reports lent support to a market
that fell sharply in late January, marking its worst monthly
performance since the bear market early last year. The Dow Jones
industrials reached a 15-month high of 10,725.43 on Jan. 19 but is
still down 6.1 percent since then.
In midday trading, the Dow rose 80.86, or 0.8 percent, to 10,148.19.
The broader Standard & Poor’s 500 index rose 10.00, or 0.9 percent,
to 1,083.87. The Nasdaq composite index rose 9.12, or 0.4 percent, to
2,156.47.
Bond prices fell, pushing yields higher. The yield on the benchmark
10-year Treasury note rose to 3.66 percent from 3.60 percent late
Friday.
The dollar mostly fell against other major currencies, while gold prices rose.
On Monday, President Barack Obama sent the U.S. Congress a $3.83
trillion budget that would pour more money into the fight against high
unemployment and boost taxes on the wealthy. The nation’s unemployment
rate sits at 10 percent.
In corporate news, Exxon Mobil Corp. reported its fourth-quarter
earnings fell 23 percent but topped analysts’ estimates. The company’s
shares rose $1.87, or 2.9 percent, to $66.30, helping boost energy
stocks.
Crude oil rose 90 cents to $73.79 per barrel on the New York Mercantile Exchange.
Three stocks rose for every one that fell on the New York Stock
Exchange, where volume came to 395.5 million shares compared with 470.4
million shares traded at the same point Friday.
The Russell 2000 index of smaller companies rose 1.93, or 0.3 percent, to 603.97.
In afternoon trading, Britain’s FTSE 100 rose 1.1 percent, Germany’s
DAX index rose 0.8 percent, and France’s CAC-40 rose 0.6 percent.
Earlier, Japan’s Nikkei stock average rose 0.1 percent.
