WASHINGTON: US stock markets rebounded from an early sharp fall Monday after the Institute of Supply Management said a software error caused it to report a slowdown in US manufacturing activity.
The ISM corrected the data to show an acceleration in the sector in May, its purchasing managers index rising to 55.4 from 54.9 the previous month, rather than slowing to 53.2 as it first reported.
The first PMI release, suggesting the economy sagged in May, sent US stocks tumbling before economists began questioning the data and, some time later, ISM economist Bradley Holcomb told business news television that there had been an error.
The markets recovered, and hours later ISM released a formal statement with an official correction.
"We apologize for this error. We have recalculated and confirmed that the actual index indicates that the economy is accelerating," Holcomb said in the statement.
ISM, an industry research group and forum, blamed "an error in its software programming."
"Our research team is analyzing our internal processes to ensure that this doesn't happen again," Holcomb said.
The data showed general improvement with new orders and production picking up pace. But employment grew at a slower pace than April, as did supplier deliveries.
ISM said comments from its panel for the survey "reflect generally steady growth, but note some areas of concern regarding raw materials pricing and supply tightness and shortages."
The S&P 500, which was down more than seven points following the first, erroneous report, was up 1.00 point at 1,924.57 in afternoon trade.
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