The stock market jumped on the first trading day of the year following reports of stronger manufacturing activity around the world as well as a rise in oil prices, according to AP. Major stock indexes rose more than 1.5 percent, including the Dow Jones industrial average, which rose 165 points. A U.S. trade group said manufacturing activity expanded faster than expected in December. The Institute for Supply Management"s index of manufacturing activity rose to 55.9 from 53.6 in November, more than analysts had expected. Overseas markets were already higher on news that China"s manufacturing industry expanded last month at the fastest rate in 20 months. There were also positive signs on manufacturing activity in Europe. A monthly purchasing managers" index for the 16 countries that use the euro rose to a 21-month high, and a similar survey for Britain rose to a 25-month high. Meanwhile a weakening dollar boosted commodities prices, lifting energy and materials stocks. An analyst"s upgrade of semiconductor maker Intel Corp. sent technology shares higher. Joe Battipaglia, market strategist for the private client group at Stifel Nicolaus & Co. in Yardley, Pennsylvania, said the improved manufacturing activity boosted expectations that an economic recovery is taking hold. In particular, investors are hoping that strength in China will spill over into other countries. «It looks like China is now the locomotive for the global economic train,» Battipaglia said. Battipaglia warned, however, that strength in China will only last if hard-hit developed economies like the U.S. and Europe can heal fast enough to absorb some of the goods China is creating. In midday trading, the Dow industrials rose 164.98, or 1.6 percent, to 10,593.03. The Standard & Poor"s 500 index rose 18.24, or 1.6 percent, to 1,133.34, while the Nasdaq composite index rose 40.99, or 1.8 percent, to 2,310.14. In economic news, Federal Reserve Chairman Ben Bernanke said Sunday that he wouldn"t rule out higher interest rates to stop new speculative investment bubbles from forming. However, he did say stronger regulation is the best way to avoid such bubbles that helped push the economy into recession. Bond prices were mixed. The yield on the benchmark 10-year Treasury note, which moves opposite its price, was flat at 3.84 percent from late Thursday. Markets were closed Friday. Crude oil rose $1.81 to $81.17 per barrel on the New York Mercantile Exchange. The technology industry got a boost after Robert W. Baird & Co. upgraded chipmaker Intel Corp. to «Outperform» and increased its price target on the stock to $26. The stock has traded from $12.05-$21.27 in the past 12 months. The dollar fell against other major currencies, while gold prices rose.
