While you were sleeping: Manufacturing accelerates

While you were sleeping: Manufacturing accelerates

(BusinessDesk) February 2 - Equities on Wall Street advanced as U.S. manufacturing data provided another convincing indication of the strength in the economic recovery. Copper rose to a record.

In midday trading, the Dow Jones Industrial Average was up 0.81%, the S&P 500 Index advanced 1.28% and the Nasdaq Composite Index climbed 1.44%.

U.S. manufacturing unexpectedly rose in January at the fastest pace since May 2004, the latest in a string of data suggesting the pace of economic recovery is on track.

"It's a good number," Gary Thayer, chief macroeconomic strategist at Wells Fargo Advisors in St. Louis, Missouri, told Reuters. “Manufacturing is outperforming other parts of the economy, but we're also seeing some inflationary seeds in costs rising.”

The positive mood was underpinned by United Parcel Service Inc, as profit at the world's largest package delivery group surpassed expectations. It forecast record earnings in 2011.

Pfizer Inc climbed 4% after the drugmaker announced an additional US$5 billion stock buyback plan, even though it cut its sales projection for 2012.

Reminding investors that some parts of the economy were still struggling, a separate report from the U.S. Commerce Department showed construction spending declined in December to its lowest level in more than 10 years.

Investors are now focused on Friday's payrolls report expected to show the world’s largest economy added jobs for a fourth straight month.

U.S. Treasuries declined. Yields on the 30-year bond rose six basis points to 4.63% at 10.33am in New York, according to BGCantor Market Data.

In Europe, the benchmark Stoxx 600 Index gained 1.4% to 284.09 at 3.39pm in London. National benchmark indexes rose in all of the 18 western European markets today, except Sweden.

The euro also strengthened, climbing to its highest level against the greenback in more than two months.

The euro rose as high as US$1.3776 on trading platform EBS. It recently traded at US$1.3759, 0.5% higher on the day.

Copper climbed to a record, bolstered by encouraging economic data and concern about supply. Three-month copper on the London Metal Exchange traded at US$9,810 a tonne, from US$9,745 on Monday.

Oil fell, though stayed above US$100 a barrel amid concern Egypt's social unrest could spread to neighbouring OPEC members. The King of Jordan today sacked the government and Yemen’s president called for a meeting of parliament; both moves seen as efforts to address social issues in each country.

"The dangers of possible insecurity pushed it to break US$101, but that has been pretty much discounted now, it's been priced in. For another push, the market is looking for an indication that demand is growing," Simon Wardell, oil analyst at Global Insight, told Reuters.

"In the absence of another sign of demand growth or a [U.S.] weaker dollar, you could probablyexpect the price to come down a little. Then seasonality in demand will kick in and there could be another push for the US$100 range in the second quarter," he said.

Brent crude futures was 53 cents lower at US$100.48 a barrel. U.S. crude oil futures declined US$1.01 to US$91.18 per barrel as of 1350 GMT.

(BusinessDesk)

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