Stocks finished near session highs Monday as the latest economic updates painted a picture of a recovering manufacturing sector.
The Dow Jones industrial average rose 94.22 points, or 0.89%, to 10,678.14. The broader Standard & Poor's 500-stock index was up 11.03 points, to 0.96%, to 1,155.97. The tech-heavy Nasdaq composite index gained 27.98 points, or 1.38%, to 2,057.80.
The latest economic numbers seemed to encourage investors. The Institute of Supply Management manufacturing index came in at 61.4 in February, a touch lower than the consensus expectation of 62. The employment index rose to 56.3 -- a level not seen since 1987 -- from 52.9.
The rise may portend better employment data in the highly anticipated February employment report, which is due Friday. The report is expected to show a rise of 125,000 new jobs for the month.
The Commerce Department said consumer spending rose 0.4% in January after a 0.5% gain in December. Personal income inched up 0.2%. The increases were somewhat lower than expected on slowing auto sales.
Other data, though less influential, are due Tuesday -- on layoffs and vehicle sales.
"The bias toward 'upside surprises' and more favorable relative earnings growth among the more economically sensitive sectors leads us to conclude that a larger weighting should be given to these groups in the portfolio mix at this time," says Joseph Battipaglia, chief investment officer at Ryan Beck.
In company news Monday, federal investigators are probing whether Coca-Cola Co. (KO) overstated results for several years by inflating sales to a Japanese company, according to the Wall Street Journal.
Walt Disney's (DIS) annual meeting will be closely watched Monday. The fate of CEO Michael Eisner is in question.
British property firm Benchmark Group Plc said it was in talks with General Electric (GE) about a takeover bid for the company worth more than $500 million.
In technology news, before the open Monday JP Morgan cut its rating on Intel (INTC) on indications that sales of laptop computers were slowing. It also cuts its rating on Advanced Micro Devices (AMD) because of price pressures.
In other tech news, Sprint Corp. said it would combine its wireless tracking stock (PCS) with its wireline shares (FON) starting in April, making it easier to acquire rivals while protecting its wireless side from unwanted takeover bids.
Some biotech names were in the news Monday. Sepracor (SEPR) said over the weekend that it received conditional FDA approval for its sleep drug, Estorra, and would not need to conduct more clinical trials.
Medimmune (MEDI), maker of FluMist, said that results would fall well short of guidance as the company spends more on research and its partner Wyeth (WYE) considers backing out of the deal.
The earnings calendar this week is relatively light. On Tuesday, Acambis (ACAM), Biogen Idec (BIIB), BJ's Wholesale Club (BJ) and Foot Locker (FL) are due to report.
Treasuries finished lower in price following a rise in the employment measure of the ISM index. The bond market is also consolidating month-end gains and appears cautious ahead of a week packed with economic data.
European stock markets finished at 19-month highs as record profits from British bank HSBC fueled optimism for improving corporate earnings. Oil companies, telecoms and mining concerns led gains. London's Financial Times-Stock Exchange 100 index finished up 44.80 points, or 1%, to 4,537.
Germany's DAX index ended higher by 36.27 points, or 0.90%, to 4,054.43. In Paris, the CAC 40 gained 23.43 points, or 0.63%, to 3,748.87.
In Japan, markets finished at 20-month highs amid economic optimism. The Nikkei 225 index gained 229.2 points, or 2.08%, to 11,271.2. In Hong Kong, the Hang Seng index added 11.62 points, or 0.08%, to 13,918.65.