Wall St gains as third quarter opens

NEW YORK: Wall Street shares opened a new month and quarter on an upbeat note Wednesday, as an encouraging report on the US manufacturing sector helped offset weak news on the labour market.

The Dow Jones Industrial Average rose 57.06 points (0.68 per cent) to close at 8,504.06, paring some of the session’s early gains.The Nasdaq climbed 10.68 points (0.58 per cent) to 1,845.72 and the Standard & Poor’s 500 broad-market index increased 4.01 points (0.44 per cent) to 923.33.The market appeared to focus on a report showing signs of improvement in the US manufacturing sector in June even though it failed to grow for a 17th straight month.

The Institute of Supply Management manufacturing index, also known as the purchasing managers (PMI) index, increased to 44.8 per cent from 42.8 per cent in May. It was still below the 50 per cent level that separates expansion and contraction, and just under the 45 per cent expected by private economists.

But Ryan Sweet at Moody’s Economy.com said the ISM report “suggests that the worst of the manufacturing contraction is behind us. The details of the report were much more upbeat than the headline number would suggest.” Nick Verdi at Barclays Research said the US report and similar surveys from overseas suggest the global factory sector is coming out of its slump.

“June’s ISM US manufacturing report, together with increases in the key European and Asian PMI surveys, implies that our global manufacturing confidence indicator picked up for the sixth consecutive month in June,” he said.

This news helped offset a survey from payrolls firm showing the US private sector shed 473,000 jobs in June.“The ADP report for June wasn’t as dire as the initial headlines indicated,” said Patrick O’Hare at Briefing.com “Nonetheless, it isn’t good news. It is a sobering reminder that the labour market is weak and that there is a heightened risk of disappointment in the (official) nonfarm payrolls number that will be reported Thursday.” -- AFP