Wall Street opened a new month and quarter on an upbeat note on Wednesday, as an encouraging report on the US manufacturing sector helped offset weak news from the labour market.

The Dow Jones Industrial Average rose 57.06 points (0.68 percent) to close at 8504.06, paring some of the session's early gains.

The Nasdaq climbed 10.68 points (0.58 percent) to 1845.72 and the Standard & Poor's 500 broad-market index increased 4.01 points (0.44 percent) to 923.33.

The market drew encouragement from a report showing signs of improvement in the US manufacturing sector in June even though it failed to grow for a 17th straight month.

PMI positive

The Institute of Supply Management manufacturing index, also known as the purchasing managers (PMI) index, increased to 44.8 percent from 42.8 percent in May. It was below the 50 percent level that separates expansion and contraction, and just under the 45 percent expected by private economists.

But Ryan Sweet at Moody's Economy.com said the ISM report "suggests that the worst of the manufacturing contraction is behind us. The details of the report were much more upbeat than the headline number would suggest."

Nick Verdi at Barclays Research said the US report and similar surveys from overseas suggest the global factory sector is coming out of its slump.

"June's ISM US manufacturing report, together with increases in the key European and Asian PMI surveys, implies that our global manufacturing confidence indicator picked up for the sixth consecutive month in June," he said.

This news helped offset a survey from payrolls firm showing the US private sector shed 473 000 jobs in June.

"The ADP report for June wasn't as dire as the initial headlines indicated," said Patrick O'Hare at Briefing.com

Sobering reminder

"Nonetheless, it isn't good news. It is a sobering reminder that the labor market is weak and that there is a heightened risk of disappointment in the (official) nonfarm payrolls number that will be reported on Thursday."

Market action came as the main indexes ended the second quarter on Tuesday with robust gains. The blue-chip Dow jumped 11 percent in the past three months, the Nasdaq surged 20 percent and the S&P 500 advanced 15 percent.

Among key stocks in focus, General Mills rallied 3.86 percent to 58.18 dollars after the food giant reported quarterly profits ahead of the consensus estimate and issued upbeat guidance.

Citigroup was unchanged at 2.95 dollars after the troubled US banking giant finalized a deal to sell its Japan-based NikkoCiti Trust and Banking Corp unit to Nomura Holdings for 19-billion yen ($200-million).

In technology, Intel lifted 2.96 percent to 17.04 dollars on a positive brokerage comment on the chip giant. Elsewhere, Apple added 0.28 percent to 142.83 while Google gave up early gains and fell 0.62 percent to 418.99 dollars.

Bonds slumped on a shift into equities. The 10-year US Treasury bond yielded 3.544 percent compared with 3.523 percent on Tuesday while the yield on the 30-year bond increased to 4.347 percent against 4.311 percent. Bond yields and prices move in opposite directions.

AFP

RSS
Digg
de.li.cious
facebook