The Dow Jones Industrial Average
Booming highs early in the day came off positive manufacturing news, as the Institute for Supply Management's Purchasing Managers Index showed that American manufacturing activity in August broke a three-month contraction skid, posting its first increase since May. The PMI's rating of a 51.5 -- where numbers above 50 indicate manufacturing purchasing expansion -- beat out expectations of 49.7, which would have indicated a fourth straight month of contraction. Wall Street analysts often use the PMI as a prediction of an outlook of the future economy, so the latest rating lends strength to the continuation of the U.S. economic recovery.
After last Thursday's 13% drop in durable-goods orders, Wall Street heartily welcomed the news, as the Dow rocketed up in the first hour of trading. International PMI indicators also buoyed the positive manufacturing sentiment, as manufacturing contraction slowed for both the eurozone and China in August. However, the eurozone's manufacturing contraction still invited investor caution with a reading of 46.1 -- indicating the possibility of a renewed recession in the region.
The Dow retreated in the afternoon session, giving back some of its gains after Federal Reserve Chairman Ben Bernanke's defense of the Fed's renewed stimulus plan. Bernanke announced that he didn't expect the U.S. economy to dip into recession, but he does worry about economic growth in the face of sluggish job creation and a high unemployment rate.
The CBOE Volatility Index
Financial stocks led the Dow higher, as Bank of America
New Dow member UnitedHealth Group led all Dow stocks, rising 1.9%. Meanwhile, Microsoft
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