Posted on June - 30 - 2011
Boost in factory activity suggests economy comeback
More evidence that activity at U.S. factories is perking up soothed investors’ fears that the economy is out of fuel and sent stocks higher yesterday.
The market climbed for a fifth day in a row, giving stocks their biggest one-week gain in two years.
Progress toward getting financially troubled Greece the funding it needs helped fuel the rally this week, and investors focused on the positives in a mixed batch of economic data.
Stocks rose after the Institute for Supply Management said its index of national factory activity rose to 55.3 in June, surpassing economists’ forecasts of 51.8. In May, it fell to 53.5, its lowest level since September 2009.
“It sets the groundwork for acceleration in growth for the second half of the year,” Michael Gapen, chief U.S. economist at Barclays Capital, told Reuters.
While many of the obstacles facing the economy – such as high gas prices – are fading, data show the recovery remains spotty and consumers are wary.
The Thomson Reuters/University of Michigan final June consumer sentiment index came in at 71.5, down from 74.3 the month before.
Another report showed U.S.