S&P 500 and Nasdaq Up 2.7%

Bikram Pandey
01 Sep, 2010
New York City

U.S. stocks surged after manufacturing index showed a surprise growth and small but still an expansion in China. Commodities linked Australian economy registered 1.2% growth. Investors are awaiting monthly jobless data and rate report on Friday.

[R]1:25 PM New York – U.S. stocks surged after manufacturing index showed a surprise growth and small but still an expansion in China. Commodities linked Australian economy registered 1.2% growth. Investors are awaiting monthly jobless data and rate report on Friday.[/R]

The Dow Jones Industrial Average increased 2.4% or 239.12 to 10,253.70 and the Nasdaq and the S&P 500 index gained 2.7%.

Asian and European markets gained after China reported a pickup in manufacturing activities and Australia’s GDP expanded at the faster pace than anticipated.

Manufacturing index tracked by the Institute of Supply Management said rose to 56.3 in august from 55.5 in July. The reading above 50 indicates an expansion and the increase in the index was not widely anticipated.

The sentiment in trading changed after the release of the index data in the morning and lifted stocks across all sectors ahead of the unemployment report on Friday and before 3-day weekend.

ADP survey showed that private sector employment unexpectedly showed a modest decrease in the month of August. The report showed that private sector employment fell by 10,000 jobs in August following a downwardly revised increase of 37,000 jobs in July.

U.S. mortgage applications rose for a fifth week in a row as borrowers took advantage of exceedingly low interest rates, according to industry data published today.

The Mortgage Bankers Association''s survey for the week ending August 27 showed overall mortgage volume increased 2.7% on a seasonally adjusted basis from one week earlier.

The Refinance Index increased 2.8 percent from the previous week and the seasonally adjusted Purchase Index increased 1.8% from one week earlier.

The Australian Bureau of Statistics reported that the Australian economy grew 1.2% in the April-June quarter, compared to the 0.7% growth in the previous quarter. On a year-over-year basis, the economy grew 3.3%.

China reported that manufacturing activity rose slightly in August, ending a two-month contraction. Markit Economics said the HSBC manufacturing purchasing managers'' index was at a seasonally adjusted 51.9, up from 49.4 in July.

Burger King Holdings Inc., the burger chain is in discussions with private equity firms for a possible sale of the company, the Wall Street Journal reported, quoting people familiar with the matter.

British private equity firm 3i Group PLC is said to be interested in the hamburger chain, but the status of the talks is not yet clear. ""It''s uncertain whether these discussions will result in a sale,"" the report added.

European markets closed up sharply tracking gains in Asia and a sharp rally in the U.S. In London, FTSE 100 index closed up 2.7%, in Paris CAC 40 soared 3.8% and in Frankfurt DAX 30 advanced 2.68% at close.