S&P 500 Crosses 1,000, Is Dow 10,000 Next?

August 3, 2009 5:13 PM EDT

The S&P 500 (NYSE: SPY) crossed the 1,000 mark for the first time since November, gaining 15 points to close at 1002.63, which represents a 50% gain from the March low of 666.79. The Dow and Nasdaq also had impressive gains today, adding 115 and 30 points respectively. The Nasdaq (Nasdaq: QQQQ) closed above the 2000 mark for the first time this year.

Better-than-expected manufacturing data in the U.S. and China and construction spending data helped set the pace for today's upside action. In addition, vehicle sales also proved better-than-expected for July, propelled by the "cash for clunkers" program. In fact, Ford (NYSE: F) posted its first sales gain since 2007 and was the first of the major manufacturers to post a increase in sales in 2009.

The widely-watched ISM Manufacturing Index was reported at 48.9, which was above the prior month's reading of 44.8 and the consensus of 46.5. While the reading was below 50, signaling manufacturing failed to grow for the 18th consecutive month, the decline was slower when compared to June. In addition, leading components of the PMI — the New Orders and Production Indexes — rose significantly above 50%, setting an expectation for future manufacturing growth.

Manufacturing data in China showed that manufacturing in the up-and-coming superpower expanded in July. The CLSA China Purchasing Managers' Index rose to 52.8 in July, from 51.8 in June, the highest level in a year.

Construction spending showed a surprise rise of 0.03%, which was above last month's revised reading of a 0.8% drop and the consensus of a 0.5% drop.

With the S&P 500 over 1000, traders have now set their sights on Dow 10,000. Whether this proves too optimistic remains to be seen.

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• ISM Manufacturing
• Standard & Poor's

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