Stocks rise as US manufacturing expands
STEVE ROTHWELL, AP Markets Writer
Feb 20, 2014 at 3:11 PM
NEW YORK (AP) — Stocks rose Thursday after a survey showed that U.S. manufacturing expanded at the fastest pace in almost four years. The report helped offset a weak survey on Chinese manufacturing.KEEPING SCORE: The Standard & Poor's 500 index rose 10 points, or 0.6 percent, to 1,839 as of 2:43 p.m. Eastern time. The Dow Jones industrial average gained 102 points, or 0.6 percent, to 16,142. The Nasdaq composite climbed 24 points, or 0.6 percent, to 4,262.MADE IN THE USA: Manufacturing in the U.S. expanded at the fastest pace in almost four years in February, according to a private survey by Markit. The survey reflected a strong rebound following a slowdown in January. The Markit Flash U.S. Manufacturing index rose to 56.7 from 53.7 in January. Numbers above 50 indicate manufacturing is increasing. In a separate report, the Conference Board said that its index of leading indicators posted a moderate gain in January, suggesting that the economy will continue to expand in the first half of this year.KEEP THE FAITH: The encouraging manufacturing survey comes after some weak economic reports at the start of the year and should help ease some of the concerns about the U.S. economy that pushed stocks lower in January."If you look at the health of manufacturing and the health of the consumer and those two things are good, it's positive indeed," said Doug Cote, chief market strategist at ING Investment Management. He expects the S&P 500 index to climb as high as 2,020 this year.CHINA SLOWDOWN: The results from the U.S. survey contrasted with a survey of manufacturing in China, where manufacturing contracted for a second straight month in February. The preliminary version of the HSBC Corp. purchasing managers' index fell to a seven-month low of 48.3 from 49.5 in January.THE BIGGER PICTURE: Stocks are close to being flat for the year. The market remains near record levels after dipping in January on concern about growth in emerging markets and questions about the health of the U.S. economy. Stocks bounced back after companies reported higher earnings for the fourth quarter and amid optimism that the Fed will keep its ultra-low interest rates in place after it finishes unwinding its bond-buying program.EARNINGS JOLT: Tesla Motors jumped $16.26, or 8.3 percent, to $209.74 after the electric car maker delivered a strong fourth-quarter performance late Wednesday and said it expects the company's vehicle sales to rise sharply this year.GROCERY SALE: Safeway was among the biggest gainers in the S&P 500 after the grocer said it was in talks to put itself up for sale. Safeway climbed $1.20, or 3.5 percent, to $35.81 after the company said late Wednesday that discussions are ongoing but that it hasn't yet reached an agreement on a transaction.WAL-MART OUTLOOK: Wal-Mart Stores fell $1.30, or 1.7 percent, to $73.55 after the company offered a weak profit outlook, signaling that it expects economic pressures to keep weighing on its low-income shoppers around the world. The world's largest retailer also said Thursday that its fourth-quarter profit, which covers the crucial holiday season, dropped 21 percent.'OILS' NOT WELL: Energy company Denbury Resources fell 27 cents, or 1.7 percent, to $15.91 after it posted earnings that fell short of the expectations of Wall Street analysts. The company also said that its 2014 production would likely be at the lower end of its expectations.BONDS, COMMODITIES: The yield on the 10-year note rose to 2.76 percent from 2.74 percent on Wednesday. The price of oil fell 39 cents, or 0.4 percent, to $102.92. The price of gold fell $3.50, or 0.3 percent, to $1,316.90 an ounce.