A European manufacturing gauge surveying purchasing managers across the 17 member euro area improved in December to 46.9, from 46.4, but continued to show economic contraction while sitting below the 50 mark. The Chinese PMI measure only improved to 50.3 from 49. An Indian PMI measure added support though, as it indicated Indian activity was more significantly improved; the Indian PMI Index rose to 54.2, from 51 in November.
The international news was enough for the market to rise into the American manufacturing data release at 10:00 AM. The Institute for Supply Management (ISM) reported its Manufacturing Index for the month of December gained to 53.9, ahead of the consensus view for a reading of 53.2, according to Bloomberg’s survey. The figure also showed an improved state over November’s index reading of 52.7. I’m still not enthused though, as I look for things to get worse here in 2012, with Europe closing somewhat to U.S. exports. Still, American industrials shares were higher on the day, with the Industrial Select Sector SPDR (NYSE: XLI) up over 2%, and major manufacturers General Electric (NYSE: GE) up 2.5% and Caterpillar (NYSE: CAT) up 3.7%.
Construction Spending data only offered further support for the rally, as it was reported 1.2% higher in November, exceeding economists’ expectations for a 0.5% increase. However, this figure benefited from a revision to the prior month from an increase of 0.8% initially reported to a decrease of 0.2%. There has been an increase in multi-family home construction, which could be the main driver of activity in my view. I do not necessarily see this as a good thing, as home ownership goes by the way side. The shares of builders Hovnanian (NYSE: HOV) and PulteGroup (NYSE: PHM) were up 6.9% and 3.3%, respectively.
The business wire also offered the release of the Federal Reserve’s FOMC meeting minutes for its December 13 meeting. Financial shares reacted well on the day and held high after the 2 PM release, with Bank of America (NYSE: BAC) up 4.3%, Wells Fargo (NYSE: WFC) up 3.2% and J.P. Morgan Chase (NYSE: JPM) higher by 5.2%.
The post holiday corporate earnings wire had a handful of names reporting. Landec (Nasdaq: LNDC) posted at the close of trading and was up 6.9% through the day, and is up more than 4% after hours. Progress Software (Nasdaq: PRGS) also posted at the close, and while it was higher by 2.3% during the day, it dropped more than 8% after hours. Team Inc. (Nasdaq: TISI) posted after hours and was up fractionally during the day and 3.5% after hours.
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