Investing.com - Service sector activity in the U.S. grew at the fastest pace in five months in April, boosting optimism that the U.S. economy may be stabilizing after a recent bout of weakness, industry data showed on Tuesday.
In a report, the Institute of Supply Management said its non-manufacturing purchasing manager's index rose to 57.8 last month, above forecasts for a reading of 56.2 and up from 56.5 in March.
The New Orders Index registered 59.2, 1.4 points higher than the reading of 57.8 registered in March.
The Employment Index increased 0.1 points to 56.7 from the March reading of 56.6 and indicates growth for the 14th consecutive month.
The Prices Index decreased 2.3 points from the March reading of 52.4 to 50.1, indicating prices increased in April for the second consecutive month, but at a slower rate.
On the index, a reading above 50.0 indicates the non-manufacturing sector economy is generally expanding, below 50.0 indicates the sector is contracting.
According to the NMI, 14 non-manufacturing industries reported growth in April. The majority of respondents indicate that there has been an uptick in business activity due to the improved economic climate and prevailing stability in business conditions.
EUR/USD was trading at 1.1134 from around 1.1162 ahead of the release of the data, GBP/USD was at 1.5162 from 1.5179 earlier, while USD/JPY was at 120.40 from 120.21 earlier.
The US dollar index, which tracks the greenback against a basket of six major rivals, was at 95.59, compared to 95.38 ahead of the report.
Meanwhile, U.S. stock markets were modestly lower after the open. The Dow 30 shed 0.25%, the S&P 500 inched down 0.35%, while the Nasdaq Composite dipped 0.75%.
Elsewhere, in the commodities market, gold futures traded at $1,194.60 a troy ounce, compared to $1,198.60 ahead of the data, while crude oil traded at $60.56 a barrel from $60.63 earlier.