BLBG: U.S. Stocks Gain on Global Economy Before American Data
U.S. stocks rose, following the worst month since May 2012 for the Standard & Poor’s 500 Index, amid signs of global manufacturing growth before American factory data as investors analyzed the situation in Syria.
The S&P 500 climbed 0.7 percent to 1,643.92 at 9:31 a.m. in New York. U.S. exchanges were closed yesterday for the Labor Day holiday.
“Manufacturing is finally increasing,” said James Kinghorn, who helps oversee 146 billion pounds ($227 billion) at Scottish Widows Investment Partnership in Edinburgh. “Mergers and acquisitions activity is a good start as it looks like companies are more comfortable in putting money to work.”
Global stocks rose yesterday as data showed China’s manufacturing index increased to a 16-month high in August, while other gauges showed euro-area factory output expanded at a faster pace than initially estimated in August.
A report at 10 a.m. New York time will probably show that manufacturing in the world’s largest economy expanded last month. The Institute for Supply Management’s factory index slipped to 54 from 55.4 in July, according to the median forecast of 80 economists in a Bloomberg News survey. Readings above 50 mean that activity increased.
Another release due at the same time may show construction spending increased 0.4 percent in July. A Labor Department report on Sept. 6 may show that employers added 180,000 workers in August, according to the median economist forecast in a Bloomberg News survey. They hired a net 162,000 in July.
The S&P 500 fell 3.1 percent in August amid concern the Federal Reserve would reduce its monthly bond purchases and the U.S. would take military action against Syria.
The Fed holds a policy meeting on Sept. 17-18 to decide whether to slow the pace of its bond-buying program. Chairman Ben S. Bernanke has said that the central bank may reduce its monthly purchases if the employment outlook substantially improves and the economy grows in line with forecasts.
President Barrack Obama announced on Aug. 31 that he’d seek support from Congress for a military strike in Syria. The decision came after Obama said previously that he had authority to order a military mission in response to what his administration and the French and U.K. governments say was the Syrian regime’s Aug. 21 chemical weapons attack on civilians.
The president won conditional support yesterday from Republican Senators John McCain and Lindsey Graham. Obama will meet later today with the leaders of both houses of Congress and the chairmen and ranking minority members of the armed services, foreign affairs and intelligence committees.
To contact the reporter on this story: Sofia Horta e Costa in London at shortaecosta@bloomberg.net
To contact the editors responsible for this story: Andrew Rummer at arummer@bloomberg.net; Lynn Thomasson at lthomasson@bloomberg.net
