Dow Jones Industrial Average Soars After Strong Manufacturing Data
The Dow Jones Industrial Average (DJIA) was trading higher on Tuesday, following a better-than-forecast ISM manufacturing report.
The Dow Jones Index was up one percent at 16,686.47 at 10:27 a.m. in New York, after reaching as high as 16,693.97 earlier in the session.
Twenty-eight issues out of 30 stocks were in positive territory. At least six stocks gained more than two percent, including Visa Inc (NYSE:V), JPMorgan Chase (NYSE:JPM), and Goldman Sachs Group Inc (NYSE:GS).
The U.S. economy’s manufacturing sector contracted for a fourth straight month in January but at a slower pace than December, according to an industry report released on Monday.
February ISM manufacturing came in at 49.5, about one point above forecast and surpassing January’s 48.2 print.
The figure still remained below the 50 contraction-expansion level. A reading above 50 points to expansion in the manufacturing sector and a reading below 50 points to contraction.
United Technologies (NYSE:UTX) fell 2.7% to $94.02 after Honeywell International Inc. (NYSE:HON) dropped its $90.0 billion bid of the jet producer because of the Connecticut-based company’s “unwillingness to engage in negotiations.” Shares of Honeywell advanced 3% to $104.41.
However, RBC Capital upgraded UTX stock to “outperform” from “sector perform,” saying the company is now “in play” despite its rejection of Honeywell’s buyout overture.
Apple Inc. (NASDAQ:AAPL) rose 2.2% to $98.79, paring this year’s slide to 6.1%. The Cupertino, California-based company’s legal chief and FBI director James Comey will both appear before a congressional panel on Tuesday as the two sides make their cases on the ongoing battle over encryption technology.
All three U.S. major indices were high on Tuesday morning. The S&P 500 was up 1.3% at 1,956, and the NASDAQ Composite was up 1.6% at 4,631. The major averages closed lower on Monday.
Chinese stocks ended higher, shaking off data from China’s official purchasing managers index that hinted sluggishness in the world’s second-largest economy.
The Markit manufacturing PMI for February came in at 51.3, up from the flash 51.0 print but down from January’s final 52.4 read.
In Europe, carmakers led the Stoxx Europe 600 Index to added 0.9%.
U.S. crude oil futures for April delivery fell 0.1% to $33.72 a barrel on the New York Mercantile Exchange. Gold futures for April delivery shed 0.4% to 1,229.10 as of 10:39 a.m.
The Dow Jones Index, unlike its peers, capped February in positive territory, with a 0.3% gain. It was the first monthly increase for the Dow since November.
The Dow has retreated 4.2% since the beginning of the year, compared to a 16.3% rally for gold futures.
The best performing stock in the Dow index in 2016 is Verizon Communications Inc. (NYSE:VZ), which has rallied 10.7%, while the worst performing Dow stock is American Express (NYSE:AXP), which has slumped 19.5.
