Dow now at 10,585, up 157 points.
NEW YORK (AP) — The stock market jumped on the first trading day
of 2010 following reports of stronger manufacturing activity around
the world and a rise in oil prices.
Major stock indexes rose more than 1.5 percent, including the Dow
Jones industrial average, which picked up 160 points.
A U.S. trade group said manufacturing activity expanded faster than
expected in December. The Institute for Supply Management’s index
of manufacturing activity rose to 55.9 from 53.6 in November, more
than analysts had expected.
Overseas markets were already higher on news that China’s
manufacturing industry expanded last month at the fastest rate in
20 months.
There were also positive signs on manufacturing activity in Europe.
A monthly purchasing managers’ index for the 16 countries that use
the euro rose to a 21-month high, and a similar survey for Britain
rose to a 25-month high.
Meanwhile a weakening dollar boosted commodities prices, lifting
energy and materials stocks. An analyst’s upgrade of semiconductor
maker Intel Corp. sent technology shares higher.
Joe Battipaglia, market strategist for the private client group at
Stifel Nicolaus & Co. in Yardley, Pa., said the improved
manufacturing activity boosted expectations that an economic
recovery is taking hold. In particular, investors are hoping that
strength in China will spill over into other countries.
“It looks like China is now the locomotive for the global economic
train,” Battipaglia said.
Battipaglia warned, however, that strength in China will only last
if hard-hit developed economies like the U.S. and Europe can heal
fast enough to absorb some of the goods China is creating.
In early afternoon trading, the Dow industrials rose 161.50, or 1.6
percent, to 10,589.55. The Standard & Poor’s 500 index rose 17.75,
or 1.6 percent, to 1,132.85, while the Nasdaq composite index rose
38.85, or 1.7 percent, to 2,308.00.
In economic news, Federal Reserve Chairman Ben Bernanke said Sunday
he wouldn’t rule out higher interest rates to stop new speculative
investment bubbles from forming. However, he did say stronger
regulation is the best way to avoid such bubbles that helped push
the economy into recession.
Bond prices were mixed. The yield on the benchmark 10-year Treasury
note, which moves opposite its price, was flat at 3.84 percent from
late Thursday. Markets were closed Friday.
Crude oil rose $2.01 to $81.37 per barrel on the New York
Mercantile Exchange.
The technology industry got a boost after Robert W. Baird & Co.
upgraded chipmaker Intel Corp. to “Outperform” and increased its
price target on the stock to $26. The stock has traded in a range
of $12.05 to $21.27 in the past 12 months.
The dollar fell against other major currencies, while gold prices
rose.
Five stocks rose for every one that fell on the New York Stock
Exchange, where volume came to 469.3 million shares.
The Russell 2000 index of smaller companies rose 13.38, or 2.1
percent, to 638.77.
Britain’s FTSE 100 rose 1.6 percent, Germany’s DAX index advanced
1.5 percent, and France’s CAC-40 gained 2 percent. Japan’s Nikkei
stock average rose 1 percent.
