Manufacturing Kept Right On Expanding in October

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The big macro can cause big moves in the market. What does today's headline macro news mean for your portfolio?

What's happening: Chicago's Institute for Supply Management released its purchasing managers' report for October, and the numbers were short of expectations but were still in positive territory.

In plain English, please: Faltering manufacturing numbers have been a concern for investors and economist for months now, and the Chicago PMI report doesn't do a whole lot to allay those worries. The Chicago Business Barometer's three-month moving average fell for the seventh consecutive month, and the reading of 58.4 was below the 58.9 that economists were looking for.

However, any reading above 50 is an expansionary reading ,and among business activity indicators in the report, employment was the highest in six months and order backlogs recovered from a two-month contraction.

Stocks to watch: In light of this release, there may be reason to look at specific manufacturing companies based in the region around Chicago -- for instance, Caterpillar (NYS: CAT) , 3M (NYS: MMM) , Ford (NYS: F) , and Illinois Tool Works (NYS: ITW) . However, the health of the manufacturing sector is a key indicator for gauging the broad health of the U.S. economy, so even investors not heavily invested in manufacturing companies should take note of this report.

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At the time this article was published The Motley Fool owns shares of Ford. Motley Fool newsletter services have recommended buying shares of Ford, Illinois Tool Works, and 3M and creating a diagonal call position in 3M. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors.Fool contributorMatt Koppenhefferowns shares of 3M but has no financial interest in any of the other companies mentioned. You can check out what Matt is keeping an eye on by visiting hisCAPS portfolio, or you can follow Matt on Twitter,@KoppTheFool, or onFacebook. The Fool'sdisclosure policyprefers dividends over a sharp stick in the eye.

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