Investing.com - U.S. stocks rose on Tuesday after data revealed activity in the country's manufacturing sector picked up its pace for a second consecutive month in March.
At the close of U.S. trading, the Dow 30 rose 0.46%, the S&P 500 rose 0.70%, while the Nasdaq rose 1.64%.
The Institute for Supply Management reported earlier that its manufacturing purchasing managers' index rose to 53.7 in March from 53.2 in February, missing market expectations for a 54.0 reading.
The report showed that employment growth slowed, with the employment index falling to 51.1 from 52.3, the lowest level since June 2013.
Still, March marked the second month in which the index grew, which drew applause on Wall Street, a day after Federal Reserve Chair Janet Yellen said in a speech that the U.S. economy still needs monetary support to ensure more sustained recovery, which lifts stock prices by design.
The Fed is currently purchasing $55 billion in bonds a month to spur recovery, a monetary policy tool known as quantitative easing that suppresses long-term interest rates to prop up the economy, boosting stocks with the hope investing and hiring ensue.
Yellen's speech sent investors reevaluating the pace at which the U.S. central bank will taper its bond-buying program let alone begin hiking benchmark interest rates, and stocks continued to rise on the notion that policy will remain loose while the economy continues to improve and bring corporate fundamentals up with it.
Leading Dow Jones Industrial Average performers included Cisco Systems Inc (NASDAQ:CSCO), up 3.01%, Boeing Company (NYSE:BA), up 2.18%, and Walt Disney Company (NYSE:DIS), up 1.87%.
The Dow Jones Industrial Average's worst performers included The Travelers Companies Inc (NYSE:TRV), down 0.86%, Merck & Company Inc (NYSE:MRK), down 0.70%, and Coca-Cola Enterprises Inc (NYSE:CCE), down 0.66%.
European indices, meanwhile, finished higher.
After the close of European trade, the DJ Euro Stoxx 50 rose 0.67%, France's CAC 40 rose 0.80%, while Germany's DAX rose 0.50%. Meanwhile, in the U.K. the FTSE 100 rose 0.82%.
On Wednesday, the U.S. is to release the ADP report on private-sector job creation, which leads the government’s nonfarm payrolls report by two days. The U.S. is also to release data on factory orders.