US stocks climbed in a commodities-fuelled rally on Monday after data showed the manufacturing sector expanded for a fifth straight month, lifting confidence in a global economic recovery. Commodity prices were also lifted by a weaker US dollar, as investors hesitated ahead of Friday's key non-farm payrolls report, which could further confirm a stabilising labour market.
The Institute for Supply Management said its index of national factory activity rose to 55.9 in December, its highest level since April 2006, and above forecasts for a reading of 54.3. A reading above 50 indicates expansion. The ISM survey followed solid readings in the commodity-hungry manufacturing sectors in China and India.
"We know that manufacturing is the main catalyst for this rebound," Said Peter Boockvar, equity strategist, at Miller Tabak & Co. "What's still unanswered is where is the end demand and what is the sustainability of any rebound in manufacturing." The Dow Jones industrial average rose 160.06 points, or 1.53 percent, at 10,588.11. The Standard & Poor's 500 Index added 17.79 points, or 1.60 percent, at 1,132.89.
The Nasdaq Composite Index climbed 37.74 points, or 1.66 percent, at 2,306.89. Energy and materials were the top sectors in the S&P 500. Alcoa Inc, the aluminium producer, rose 3.7 percent to $16.70, while oil and gas producer Apache Corp added 2.2 percent to $105.41. Oil-related companies got a boost after Deutsche Bank upgraded the US refining sector, raised the ratings on several refiners, including Valero Energy Corp and Sunoco Inc.
Valero jumped 6.7 percent to $17.87, and Sunoco advanced 5.2 percent to $27.46. The PHLX Oil Service index climbed 3.5 percent. Robert W. Baird upgraded chipmaker Intel Corp to "outperform" on expectations for a rebound in corporate PC spending. That helped send the Philadelphia semiconductor index up by 1.8 percent. Intel, a Dow component and a bellwether on Nasdaq, climbed 2.4 percent to $20.88.
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