Financials Lead Stocks Higher Following Positive Manufacturing Data
U.S. manufacturing is giving investors a reason to buy again today after the Institute for Supply Management said its manufacturing gauge rose to 51.5 in September from 49.6 last month, while a gauge of new orders rose to 52.3 from 47.1. A reading of more than 50 for both measures indicates expansion in manufacturing, and this is a turnaround from three months below that level.
The new confidence in the economy pushed the Dow Jones Industrial Average (INDEX: ^DJI) up 0.67% and the S&P 500 (INDEX: ^GSPC) 0.37% higher in late trading.
Financial components were the biggest winners today. American Express, Bank of America (NYS: BAC) , and JPMorgan Chase (NYS: JPM) were all up more than 2% today. If the economy improves, it means businesses will do better, housing will improve, and banks will reap the benefits. After QE3 and stimulus in Europe, banking stocks have gone on a nice run, but the rubber meets the road when earnings begin coming out next week.
Microsoft (NAS: MSFT) is one of the few stocks in the red today after RBC Capital downgraded the stock. Microsoft seems to be having trouble getting new Windows 8 and Windows Phone 8 tablets and smartphones to market, and the competition is winning the battle in those markets before Microsoft even gets out of the gate.
Economic indicators have been mixed recently, but sentiment continues to rise, housing is improving, and strong manufacturing should help push that trend.
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The article Financials Lead Stocks Higher Following Positive Manufacturing Data originally appeared on Fool.com.
Fool contributor Travis Hoium manages an account that owns shares of Microsoft. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings, or follow his CAPS picks at TMFFlushDraw.The Motley Fool owns shares of Microsoft, Bank of America, and JPMorgan Chase. Motley Fool newsletter services have recommended buying shares of Microsoft. Motley Fool newsletter services have recommended creating a write covered strangle position in American Express. Motley Fool newsletter services have recommended creating a synthetic covered call position in Microsoft. The Motley Fool has a disclosure policy.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.
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