NEW YORK (AP) — Stocks jumped Wednesday after surprisingly strong growth in U.S. and Chinese manufacturing allayed some of the worries that had been building over the global economy in recent weeks.
The new reports snapped a string of disappointing economic data that sent stocks slumping in August. The Standard & Poor’s 500 Index, the benchmark most widely used by professional investors, lost 4.7 percent in the month, its worst performance for the month since 2001.
The Dow Jones industrial average jumped more than 220 points on the first day of September trading. Broader indexes also rose more than 2 percent. With investors pouring into stocks, Treasurys fell and interest rates rose.
The Institute for Supply Management said manufacturing activity in the U.S. rose in August, in contrast to regional reports from recent weeks that pointed to a slowdown in growth. Economists had expected a decline.
Daniel Penrod, senior industry analyst at the California Credit Union League, said manufacturing reports have become increasingly important because they are a leading indicator for whether companies might start adding new jobs. Investors will be closely watching the Labor Department’s monthly report on employment, which is due out on Friday.
“If manufacturers ramp up … it’s going to require hiring,” Penrod said. “Getting closer to that threshold (of hiring) is vital to the economy.”
The pace of growth in China’s manufacturing sector also picked up in August, according to a new report, even though economists expected a pullback. Overseas markets also got a lift Wednesday when Australia said its economy grew in the second quarter at the fastest pace in three years.
In morning trading, the Dow rose 222.89, or 2.2 percent, to 10,237.53. The Standard & Poor’s 500 index rose 26.16, or 2.5 percent, to 1,075.49, while the Nasdaq composite index rose 53.86, or 2.6 percent, to 2,167.89.
About 12 stocks rose for every one that fell on the New York Stock Exchange, where volume came to 230.5 million shares.
The yield on the 10-year Treasury note, which moves opposite its price, rose to 2.60 percent from 2.47 percent late Tuesday. That yield helps set interest rates on mortgages and other consumer loans.
In corporate news, Burger King Holdings Inc. jumped on reports it could be taken private. Shares of the fast food chain jumped $2.52, or 15.3 percent, to $18.98.
Apple Inc. shares jumped ahead of an event later where it is expected to roll out updated iPods. It rose $7.35, or 3 percent, to $250.45.
Australia’s S&P/ASX 200 index jumped 2.1 percent on the upbeat growth report. Hong Kong’s Hang Seng and Japan’s Nikkei stock average both climbed on the strong Chinese manufacturing data. Major European markets surged by more than 2 percent in afternoon trading following the strong economic data in the U.S.