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Banking industry

U.S. Stocks Rally on Upbeat Economic Reports

Strategic Insights

— 2 min read

The U.S. stock market kicked off the new year with a strong rally on Tuesday, driven by positive economic reports from around the world. Investors welcomed news of growth in China's manufacturing sector and a significant increase in India's manufacturing activity. The Dow Jones industrial average surged 240 points, or 2%, in morning trading, while the S&P 500 gained 25 points, or 2%, and the Nasdaq added 56 points, or 2.1%.

Bank stocks, which were among the worst performers last year, led the Dow higher. Bank of America, Citigroup, and JPMorgan all posted strong gains in the early going. Economic reports in the United States were also positive, with a key index of manufacturing activity rising more than expected and a big jump in construction spending.

Key Takeaways:

  • The Dow Jones industrial average jumped 240 points, or 2%, in morning trading, with bank stocks leading the rally.
  • The S&P 500 gained 25 points, or 2%, while the Nasdaq added 56 points, or 2.1%.
  • Positive economic reports from China and India, including China's manufacturing sector expanding slightly in December, contributed to the surge.
  • The Institute of Supply Management's survey of manufacturing purchasing managers rose to 53.9, beating the 53.4 forecast of economists surveyed by Briefing.com.
  • Construction spending jumped 1.2% in November, exceeding the 0.5% expected by analysts surveyed by Briefing.com.
  • The Federal Reserve will release minutes from its Dec. 13 meeting on Tuesday.
  • Chesapeake Energy shares rose after the company completed a venture with Total, giving the French firm a 25% stake in eastern Ohio's shale oil-rich area.
  • Mead Johnson Nutrition shares gained after two U.S. government agencies completed their investigation of baby formula Enfamil and found it safe to use.

Statistics:

  • The Dow Jones industrial average surged 240 points, or 2%, in morning trading.
  • The S&P 500 gained 25 points, or 2%.
  • The Nasdaq added 56 points, or 2.1%.
  • The Institute of Supply Management's survey of manufacturing purchasing managers rose to 53.9.
  • Construction spending jumped 1.2% in November.
  • The dollar fell against the euro, British pound, and Japanese yen.
  • Oil for February delivery added $3.76, or 3.8%, to $102.59 a barrel.
  • Gold futures for February delivery rose $32.80 to $1,599.60 an ounce.

Sources:

  • CNNMoney
  • Dow Jones industrial average
  • S&P 500
  • Nasdaq
  • Institute of Supply Management
  • Commerce Department
  • Briefing.com
  • Federal Reserve
  • Chesapeake Energy
  • Mead Johnson Nutrition
  • Food and Drug Administration
  • Centers for Disease Control and Prevention

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