Dow ends up 0.7%: Markets buoyant as focus turns to U.S.

By Joshua Freed, Associated Press
Updated 1h 44m ago

NEW YORK – Solid manufacturing surveys from around the world combined with further evidence that the U.S. jobs recovery is continuing to help boost markets on Wednesday as concerns over Europe's debt crisis eased.

At the close, the Dow Jones industrial average had gained 83.6 points for the day, up 0.7% to 12,716.

The broader Standard & Poor's 500 index gained 0.9%, up 11.7, and the Nasdaq composite rose 1.2%, up 34.4.

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This strong start to February comes on the heels of stocks' biggest January in 15 years.

A key manufacturing index shows that U.S. factories raised output in January by the most in seven months. And the Commerce Department says construction spending rose 1.5% in December, for the fifth monthly gain in a row.

Stock trend

Dow Jones industrial average, five trading days With figures showing that China's manufacturing sector is growing solidly and Europe's performing better than forecast, investors are hopeful that equivalent U.S. figures later will show the recovery in the world's largest economy gaining steam.

The monthly hiring survey from private payrolls agency ADP came in more or less in line with expectations and cemented market predictions that Friday's closely followed employment data from the first month of 2012 will show a 180,000 or so gain in nonfarm payroll additions. .

ADP said private employers added 170,000 jobs during the month, a little shy of expectations for a 185,000 increase but well down on December's downwardly-revised increase of 292,000.

Given the volatility of the survey, the outcome failed to dent confidence over Friday's report on job creation and the unemployment rate.

"The ADP employment report displayed a still respectable picture for the health of the overall labor market," said Andrew Wilkinson, chief economic strategist at Miller Tabak & Co. in New York.

In Europe, the FTSE 100 index of leading British shares was up 1.3% at 5,755 while Germany's DAX rose 2.1% to 6,594. The CAC-40 in France was 1.4% higher at 3,348.

The likely focus on the U.S. over the rest of the week will prove a welcome diversion for some traders from monitoring the daily grind of Europe's debt crisis.

There are signs that the crisis has eased, for now. EU leaders agreed this week to push ahead with a closer fiscal union and borrowing rates for Italy and Spain are down sharply from just a couple of months ago, suggesting increased investor confidence.

Much hinges on Greece, where the outlook also appeared brighter. Hopes were growing that a debt-reduction deal between the country and its private creditors will be concluded soon alongside a second bailout from the eurozone and the International Monetary Fund.

"We still await news from the Greek debt restructuring talks although the few comments that have been made over the last 48 hours have suggested that progress is being made," said Gary Jenkins, managing director at Swordfish Research.

The improving backdrop has helped shore up the euro, too, which was trading 0.7% higher at $1.3181.

Earlier in Asia, stock markets lacked the same momentum seen in Europe.

Tokyo's Nikkei 225 edged up less than 0.1% to close at 8,809.79 but Hong Kong's Hang Seng ended down 0.3% to 20,333.37. Mainland China's main index in Shanghai also fell 1.2% to 2,268.08.

The improved mood over the global economy helped oil prices track higher — benchmark oil for March delivery gained 59 cents to $99.07 per barrel in electronic trading on the New York Mercantile Exchange.

Dow ends up 0.7%: Markets buoyant as focus turns to U.S.