February’s Flash Manufacturing PMI reading from Markit Economics jumped to 56.7 from January’s final reading of 53.7.
Stocks headed higher on Thursday after February’s Flash U.S. Manufacturing PMI report from Markit Economics indicated a surge to 56.7 from
January’s final reading of 53.7. Economists’ expectations ranged from 52.8 to 55.0. The report also indicated that hiring picked up to the fastest pace since last March.
The monthly Purchasing Manager’s Index reports from the Institute for Supply Management are more closely followed in the United States, as Markit Economics provides PMI reports on a global scale. Nevertheless, Markit’s “flash” PMI readings are seen as early indicators of what to expect from the monthly Manufacturing PMI reports from the ISM, which directly correlate with America’s GDP readings.
The Dow Jones Industrial Average (DIA) picked up 92 points to finish Thursday’s trading session at 16,133 for a 0.58 percent advance, rising 25 points above its 50-day moving average of 16,108. The S&P 500 (SPY) climbed 0.60 percent to close at 1,839.
The Nasdaq 100 (QQQ) advanced 0.52 percent to finish at 3,671. The Russell 2000 (IWM) jumped 1.14 percent to end the day at 1,162.
In other major markets, oil (USO) dipped 0.05 percent to close at $36.88.
On London’s ICE Futures Europe Exchange, April futures for Brent crude oil dipped 3 cents (0.03 percent) to $110.44/bbl. (BNO).
April gold futures advanced $2.50 (0.19 percent) to $1,322.90 per ounce (GLD).
The transportation sector made it back to the entrance ramp on Thursday, as the Dow Jones Transportation Average climbed 1.56 percent to 7,252, coming up shy of its 50-day moving average of 7,277 (IYT).
In Japan, the exchange rate for the yen continued to be the dominant factor in stock market activity. Japanese stocks fell as the yen strengthened to 101.81 per dollar during the last 30 minutes of Thursday’s trading session in Tokyo. A stronger yen causes Japanese exports to be less competitively priced in foreign markets (FXY). The Nikkei 225 Stock Average sank 2.15 percent to 14,449 (EWJ).
In China, stocks declined after the HSBC Flash China Manufacturing PMI for February fell to a seven-month low of 48.3 from January’s final reading of 49.5. The Flash Manufacturing Output Index also fell to a seven-month low, hitting 49.2 from January’s 50.8. A reading below 50 indicates contraction. The Shanghai Composite Index declined 0.18 percent to 2,138 (FXI). Hong Kong’s Hang Seng Index fell 1.19 percent to 22,394 (EWH).
In Europe, stocks were relatively unchanged as the Markit Flash Eurozone PMI readings for February took a slight dip, which could be upwardly-revised by the final readings at the end of the month. The Flash Eurozone PMI Composite Output Index dipped to 52.7 from January’s 52.9. The Flash Eurozone Manufacturing PMI made a more significant decline to 53.0 from January’s 54.0. The Euro STOXX 50 Index finished Thursday’s session with a 0.03 percent rise to 3,121 – climbing further above its 50-day moving average of 3,061. Its Relative Strength Index is 61.20 (FEZ).
Technical indicators revealed that the S&P 500 climbed further above its 50-day moving average of 1,813 after finishing Wednesday’s trading session with a 0.60 percent advance to 1,839. Its Relative Strength Index (RSI) rose from 56.25 to 59.21. The MACD is climbing above the zero line, suggesting that the S&P could continue its advance during the immediate future.
On Thursday, all sectors were solidly in positive territory. The materials sector led the group, with a 1.05 percent advance.
Consumer Discretionary (XLY): +0.54%
Technology: (XLK): +0.33%
Industrials (XLI): +0.94%
Materials: (XLB): +1.05%
Energy (XLE): +0.66%
Financials: (XLF): +0.28
Utilities (XLU): +0.77%
Health Care: (XLV): +0.91
Consumer Staples (XLP): +0.43%
Bottom line: Investors’ appetite for risk returned on Thursday, after the “flash” reading on February Manufacturing PMI from Markit Economics severely beat expectations.
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