WORLD> America
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WORLD> America
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Stocks rise ahead of manufacturing, auto data
(Agencies)
Updated: 2008-11-03 23:42 NEW YORK -- Wall Street started November on a cautious note Monday, as stocks rose moderately after last week's surge and ahead of readings on manufacturing activity, construction spending and auto sales. Investors are already prepared for the day's reports to support the growing belief that the economy is in recession, hurt by tight credit and slow consumer spending. The question is whether the data will indicate the economy is in even more dire shape than the Dow Jones industrial average has priced in after tumbling more than 14 percent in October -- its worst month in 21 years. The Institute for Supply Management is expected to report that the manufacturing sector contracted in October faster than it did in September, while the Commerce Department is expected to report that construction spending dropped 0.8 percent in September following a flat reading for August, according to economists surveyed by Thomson/IFR. Analysts are also anticipating extremely weak vehicle sales figures from the auto industry for October -- even more anemic than in September, when automakers said fewer than 1 million vehicles were sold for the first time in 15 years. In the first hour of trading, the Dow Jones industrial average rose 37.11, or 0.40 percent, to 9,362.12. Broader stock indicators also advanced. The Standard & Poor's 500 index rose 3.13, or 0.32 percent, to 971.88, and the Nasdaq composite index rose 6.83, or 0.40 percent, to 1,727.78. Given how far the stock market has already tumbled, analysts believe the market is showing signs of bottoming out. Last month, for all its problems, did end with a positive tone, thanks in large part to weeks of gradual improvement in the tight credit markets, but also because mutual funds were finished with selling at the end of their fiscal year. The Dow added 11.3 percent last week, its best weekly performance in 34 years, while the S&P 500 index climbed 10.5 percent. On Monday, the interbank lending rate known as Libor fell to 2.86 percent for three-month dollar loans -- that's down from 3.03 percent Friday, and the lowest level since Sept. 17. A fall in the London Interbank Offered Rate indicates that banks are more willing to lend to one another. Investors' demand for short-term government debt remained high, however, a sign that they remain very cautious. The yield on the three-month Treasury bill, seen as one of the safest assets around, rose only slightly to 0.44 percent from 0.43 percent Friday. A low yield indicates high demand. The yield on the benchmark 10-year Treasury note was at 3.94 percent, down from 3.96 percent late Friday. |
