US stocks close sharply higher on positive data
US stock markets soared Monday on growing evidence that the economy is beginning to turn a corner.
The Dow Jones Industrial Average climbed 221 points to close at 8721.44. That was its highest level since January and its eighth daily rise of at least 200 points since the market's bottom in March. The index of blue-chip stocks now stands 33 percent higher than the March 9 low, although it is slightly negative for the year.
S&P, Nasdaq positive in '09
The other indexes enjoyed similar sharp rises. The Standard & Poor's 500 index climbed 2.6 percent to close at 942.87, its highest level since November. The tech-heavy Nasdaq index rose 3.1 percent to close at 1828.68. That was its highest close since October.
The market's momentum came as the federal government and a manufacturing group released better-than-expected numbers on the economy's performance. An 0.8 percent increase in construction spending for April hid some looming problems for the sector.
But a government report showed a 1.1 percent rise in Americans' disposable income for the same month, and a private manufacturing survey for May pointed to the first increase in new orders since November 2007.
The manufacturing survey from the Institute for Supply Management also showed that customer inventories were falling and that nine industries were reporting their inventories as "too low."
These latter two indexes – a rise in new orders and a fall in inventories "are the first two sub-indices to switch direction in this incipient bottoming process," wrote blogger Edward Harrison in Credit Writedowns. "You should see industrials as a canary in the coalmine for recovery as these are cyclical stocks and industries, so the ISM Index is really one to watch going forward."