Manufacturing Continues Solid Growth, Pushing Double Dip Fears Aside
The markets are moving higher on Wednesday following a manufacturing report that showed stronger-than-expected growth last month, while the mangers' desire to hire was at the highest level in almost 30 years.
The Institute for Supply Management said Wednesday that its manufacturing Index rose to 56.3 in August, as the manufacturing sector continues to the be the driving force in the economic recovery. The reading was up from 55.5 in July.
Economists had expected the ISM index to fall to 52.8 last month as fears of a double-dip recession gripped the economy. A reading above 50 signals growth.
The positive news boosted the market on Wednesday as the Dow Jones industrial average is up 2.43 percent to 10,257.85 in midday trade. The S&P 500 is up 2.71 percent to 1,077.80 and the Nasdaq has jumped 2.89 percent to 2,175.04.
The ISM survey showed that managers' desire to hire for August was at 60.4, marking the highest reading since December 1983. 10 of 18 manufacturing industries reported growth in employment in August.
The rise in the index was attributable to a rise in exports and demand for capital equipment and supplies from businesses.
New orders however slipped to the lowest level since June 2009 following a surge earlier this year. This marks a negative sign for future business and could cause economists to forecast a slowdown in manufacturing for the rest of the year.
The index had been slipping since reaching a six-year high in April of 60.4.
The continued growth in manufacturing is poking holes in the double-dip recession theories.
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The Institute for Supply Management said Wednesday that its manufacturing Index rose to 56.3 in August, as the manufacturing sector continues to the be the driving force in the economic recovery. The reading was up from 55.5 in July.
Economists had expected the ISM index to fall to 52.8 last month as fears of a double-dip recession gripped the economy. A reading above 50 signals growth.
The positive news boosted the market on Wednesday as the Dow Jones industrial average is up 2.43 percent to 10,257.85 in midday trade. The S&P 500 is up 2.71 percent to 1,077.80 and the Nasdaq has jumped 2.89 percent to 2,175.04.
The ISM survey showed that managers' desire to hire for August was at 60.4, marking the highest reading since December 1983. 10 of 18 manufacturing industries reported growth in employment in August.
The rise in the index was attributable to a rise in exports and demand for capital equipment and supplies from businesses.
New orders however slipped to the lowest level since June 2009 following a surge earlier this year. This marks a negative sign for future business and could cause economists to forecast a slowdown in manufacturing for the rest of the year.
The index had been slipping since reaching a six-year high in April of 60.4.
The continued growth in manufacturing is poking holes in the double-dip recession theories.
Get immediate access to market moving news and alerts with StreetInsider.com Premium - FREE TRIAL!
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