While you were sleeping: US manufacturing accelerates
Feb 21 (BusinessDesk) – Wall Street rose after a gauge of US manufacturing climbed to the highest level in nearly four
years, easing concern that weakness in recent data meant the recovery in the world’s largest economy was losing steam.
The Markit Economics preliminary index of manufacturing rose to 56.7 in February, up from a final number of 53.7 in
January.
"The manufacturing data is extremely positive, especially coming after a spate of bad news at a time when the Fed seems
committed to slowing stimulus," Nicholas Colas, chief market strategist at the ConvergEx Group in New York, told
Reuters.
Also positive, jobless claims declined by 3,000 to 336,000 in the week ended February 15.
Separately, the Conference Board’s leading economic index rose 0.3 percent in January, following no change in December.
"The increase … reflects an economy that is expanding moderately, although the pace is somewhat held back by persistent
and severe inclement weather in most parts of the country," economist Ken Goldstein said in a Conference Board
statement.
"If the economy is going to move on to a faster track in 2014 compared to last year, consumer demand and especially
investment will need to pick up significantly from their current trends,” Goldstein said.
In afternoon trading in New York, the Dow Jones Industrial Average gained 0.67 percent, the Standard & Poor’s 500 Index rose 0.58 percent, while the Nasdaq Composite Index advanced 0.49 percent.
Gains in shares of Verizon, last up 3.3 percent, and those of Exxon Mobil, last up 1.7 percent, helped propel the Dow
higher.
Shares of Wal-Mart fell 1.8 percent, posting the largest decline in the Dow, after the company predicted full-year
profit that failed to meet expectations.
Shares of Facebook slipped, last down 0.8 percent, after the company yesterday said it agreed to buy WhatsApp, a
messaging app with 450 million members, for US$19 billion.
“They seem to have made a pretty strong statement with this acquisition,” Debra Aho Williamson, an analyst at EMarketer,
told Bloomberg News. “Facebook has come to the realisation that it needs a portfolio of apps to reach people with
different use cases, different demographics, or different ways of communicating.”
In China, there were further signs of weakness from the world’s second-largest economy. The purchasing managers’ index
from HSBC and Markit Economics fell to of 48.3 in the preliminary February reading, down from January’s final figure of
49.5.
“The building-up of disinflationary pressures implies that the underlying momentum for manufacturing growth could be
weakening. We believe Beijing policy makers should and can fine-tune policy to keep growth at a steady pace in the
coming year,” Hongbin Qu, chief economist, China & co-head of Asian economic research at HSBC, said in a statement.
In Europe, the Stoxx 600 Index ended the session at 334.78, slightly down from the previous close. The UK’s FTSE 100
both rose 0.2percent, while France’s CAC 40 added 0.3 percent. Germany’s DAX fell 0.4 percent.
(BusinessDesk)