U.S. stocks rose on Wednesday after solid manufacturing data from around the world.
Investors have been hoping that positive manufacturing data for China and Europe mean similar growth is happening in the U.S.
That view was bolstered as the Institute for Supply Management’s manufacturing index indicated U.S. factories grew in January at the fastest pace in seven months, boosted by a rise in new orders. The trade group of purchasing managers said its manufacturing index rose last month to 54.1 from 53.1 in December. Readings above 50 indicate expansion.
In the first hour of trading, the Dow Jones industrial average rose 103 points, or 0.8 percent, to 12,736. The broader Standard & Poor’s 500 index rose 10 points, or 0.8 percent, to 1,322. The Nasdaq composite rose 14 points, or 0.5 percent, to 2,828.
Monthly hiring figures from private payroll agency ADP were so-so. ADP said private-sector employment rose by 170,000 from December to January. That was 10,000 fewer jobs than expected by analysts surveyed by FactSet. ADP also said November-to-December job growth was smaller than it previously thought ? 292,000 instead of the initially reported 325,000.
Also Wednesday, Ford and Chrysler reported U.S. sales growth for January while General Motors Co. said its sales fell 6 percent. Ford Motor Co. said sales rose 7 percent on strong demand for small cars and SUVs. Chrysler’s January sales in the U.S. jumped 44 percent.
Figures released before U.S. markets opened showed that China’s manufacturing sector is growing steadily and Europe’s is performing better than forecast. That gave investors hope that U.S. manufacturing is headed the same direction as the world’s largest economy continues its recovery.
The focus on the U.S. will prove a welcome diversion for some traders from monitoring the daily developments in Europe’s debt crisis. There are signs that the crisis has eased, for now. EU leaders agreed this week to push ahead with a closer fiscal union and borrowing rates for Italy and Spain are down sharply from just a couple of months ago, suggesting increased investor confidence.
Much hinges on Greece, where the outlook also appeared brighter. Hopes were growing that a debt-reduction deal between the country and its private creditors will be concluded soon, alongside a second bailout from the eurozone and the International Monetary Fund.
In Europe, the FTSE 100 index of leading British shares was up 1.4 percent at 5,761 while Germany’s DAX rose 2 percent to 6,592. The CAC-40 in France was 1.5 percent higher at 3,348.
The sense of an easing in Europe’s debt woes helped stocks enjoy a stellar start to the year, with many markets recovering a large chunk of their late-2011 losses. Overall, U.S. shares had their best January in 15 years.
Earlier in Asia, stock markets lacked the same momentum seen in Europe.
Tokyo’s Nikkei 225 edged up less than 0.1 percent to close at 8,809.79 but Hong Kong’s Hang Seng ended down 0.3 percent to 20,333.37. Mainland China’s main index in Shanghai also fell 1.2 percent to 2,268.08.
The improved mood over the global economy helped oil prices track higher ? benchmark oil for March delivery gained 53 cents to $99 per barrel in electronic trading on the New York Mercantile Exchange.