A better-than-expected read on US manufacturing in April and encouraging construction data drove Wall Street shares higher Tuesday as traders shrugged off some poor earnings reports.
Profit taking took root in the final hour but even so, the Dow Jones Industrial Average had its best daily finish since the final days of 2007.
The blue-chip index closed up 65.69 points, or 0.50 per cent, at 13,279.32.
The broad-based S&P 500 index gained 7.97 (0.57 per cent) to 1,405.88, while the tech-heavy Nasdaq gained 4.08 (0.13 per cent) to 3,050.44.
The market got its charge from the Institute for Supply Management’s manufacturing index, which registered a solid jump for April, rising to 54.8 per cent from 53.4 per cent in March. Analysts had expected a fall.
In addition, a reading on construction spending in March also held positive signs – it showed strength in private-sector building even though the overall data was being held back by government spending cutbacks.
“It’s a relief to see some better US economic data, particularly after the spate of negative news lately,” said Jennifer Lee at BMO Capital Markets.
Herbalife, which sells nutritional and fitness supplements and cosmetics, led turnover on the New York Stock Exchange, its shares plunging 19.39 per cent after powerful hedge-fund operator David Einhorn raised questions about its financial reporting in an earnings conference call.
Avon shares fell 8.0 per cent and Pfizer was 0.5 per cent lower after their disappointing first-quarter earnings results.
Ford and General Motors both reported significant falls in US sales in April, but Ford’s shares dropped 0.4 per cent while GM added 1.3 per cent. GM said its 8.2 per cent fall in sales was due to a decline in volume in its low-margin fleet sales unit.
Rupert Murdoch’s News Corporation added 0.9 per cent despite a scathing report from a British parliamentary committee that said the media tycoon is not fit to run a major company.
Chesapeake Energy surged 6.3 per cent after embattled chief executive Aubrey McClendon said he would resign his concurrent position as chairman and give up a special compensation deal that had garnered much criticism.
Bond prices fell. The yield on the 10-year Treasury rose to 1.96 per cent from 1.91 per cent Monday, while the 30-year rose to 3.16 per cent from 3.11 per cent.
Bond yields and prices move in opposite directions.
