U.S. manufacturing has grown the fastest in the past 10 months, which gave the NYSE stocks a lift on Tuesday and pushed the benchmark index – the Dow Jones industrial average to its highest close in more than four years.
Manufacturing expanded last month at the strongest pace since June, according to the Institute for Supply Management. Orders, hiring and production all rose.
A measure of manufacturing employment also reached a nine-month high, a hopeful sign ahead of Friday’s monthly jobs report.
The manufacturing news jolted stock indexes out of a morning stupor, although the gains waned throughout the afternoon. The Dow added 65.69 points to 13,279.32, its highest closing mark since Dec. 28, 2007, during the first month of the Great Recession.
“It definitely changed the direction of markets,” said Jack Ablin, chief investment officer at Harris Private Bank.
Treasury prices fell, and benchmark crude oil rose $1.29 to settle at $106.16 per barrel. Both of those things tend to happen when investors expect stronger economic growth.
Other indexes pushed higher. The Standard & Poor’s 500 index rose eight points to 1,406. The Nasdaq composite climbed four points to 3,050.
All 10 industry groups within the S&P 500 climbed, led by energy companies. Chesapeake Energy Corp. jumped 6 percent on reports that the company will strip CEO Aubrey McClendon of his chairman’s title.
Judging by its track record, May isn’t a promising month for stocks. Since World War II, the S&P 500 has gained an average of 0.31 percent in May. For all months, the average gain is 0.67 percent.