2
Jun
Markets up on good economic news
Stock markets have been rising strongly following upbeat
economic news.
In the US, the Dow Jones closed up 2.6%. In London the FTSE 100
closed up 2.0%. Frankfurt's Dax rose 4.1% and the Cac40 in Paris
gained 3.1%.
Reports on the manufacturing sectors in China, the US and the UK
gave fresh hope that the battered sectors were on the road to
recovery.
Also in the US, consumer spending was better than expected and
construction spending rose for the second month.
Two measures of manufacturing in China showed the sector
expanded in May.
The brokerage CLSA Asia-Pacific Markets said its purchasing
managers index rose to 51.2 in May from April's 50.1. Any reading
over 50 indicates that the sector expanded.
The official China Federation of Logistics and Purchasing said
its measure slipped to 53.1 from April's 53.5, which still
suggested growth.
A similar report in the US showed that its manufacturing sector
was still contracting in May but at the slowest pace since
September.
The Institute for Supply Management's index came in at 42.8,
which was better than had been expected.
The purchasing managers' index in the UK showed that the
manufacturing sector was also contracting in May, but that it was
shrinking at its slowest pace for a year, with a reading of
45.4.
GM out
But there was some scepticism about whether the market rally was
justified.
"I can't really buy into today's super-happy stock market," said
Kim Caughey, equity research analyst at Fort Pitt Capital
Group.
The economic data were "better than expected, but I wouldn't say
they were great", she added.
The rises came despite the news that General Motors had filed
for Chapter 11 bankruptcy protection, which had been widely
expected.
General Motors dropped out of the components of the Dow Jones
Industrial Average on Monday, as did Citigroup.
They were replaced by Cisco Systems and Travelers.
Earlier, Tokyo's Nikkei-225 closed up 1.6% and the Hang Seng in
Hong Kong soared 4.0%.
Source:
http://news.bbc.co.uk/1/hi/business/8078091.stm
Tuesday 2nd June 2009